Green bonds taking shape
Several government institutions are banding together to launch green bonds to raise capital while meeting the country’s climate commitments and achieving the Sustainable Development Goals (SDGs).
Green Bonds are instruments where the proceeds or an equivalent amount will be entirely applied in part or in full to finance or re-finance, new and/ or existing eligible green projects.
After Finance Minister Basil Rajapaksa in his 2022 budget articulated the importance of green financing, the External Resource Department (ERD) of the Treasury has mandated the Sustainability Development Council (SDC) to put the plan into action, senior officials said.
“The SDC is working with the UNDP on green financing and how natural resources in the country can be harnessed to raise financing by leveraging them. The work centres around identified projects such as climate financing, green agriculture, clean water etc,” a Treasury official told the Business Times.
He added that a sustainability investor roadmap is being worked on as a start to this initiative.
Noting that global collaboration is necessary to find sustainable solutions to global issues such as climate change and that climate-resilient development is the future, he said that there are 17 themes in SDGs where Sri Lanka needs to identify the low-hanging fruit which will attract investors.
In November last year, Treasury Secretary S. R. Attygalle told the Business Times that the government is encouraging green bonds and the Treasury is working towards policies designed towards renewable energy.
Going public with these green bonds once they are launched is also on the cards.
The Securities and Exchange Commission in principle has approved green bonds, officials said. They said the Colombo Stock Exchange is working on the necessary regulations on this.
A senior banker said the green economy and green financing and distributing Rs. 5 billion for reforestation, wildlife etc is certainly a particularly good move mentioned in the budget last year. “As the country mapped its sustainable development goal road map in conjunction with UNDP/SDC, the time is opportune to map key SDG goals which related to the green economy and develop suitable national key performance indicators to be used as a foundation in restructuring sustainability development instruments,” he added.