October 01, Colombo (LNW): In a significant milestone for Sri Lanka’s financial sector, DFCC Bank launched its first Green Bonds on the Colombo Stock Exchange (CSE), marking a major step towards addressing environmental challenges through sustainable finance.
This move allows investors to contribute to the fight against climate change while seeking financial returns, creating a mutually beneficial scenario for both the environment and the market.
Takafumi Kadono, Country Director for Sri Lanka at the Asian Development Bank (ADB), stressed the importance of green financing, highlighting its potential to save significant costs associated with post-disaster recovery.
He pointed out that natural disasters, such as floods, inflict heavy losses on the agricultural sector and other industries, with Sri Lanka spending approximately USD 313 million annually on climate-related disaster mitigation.
Kadono underscored the necessity for businesses to invest in projects that can prevent such climate-induced damage, opening new avenues for corporate investment.
Chairman of the CSE, Dilshan Wijesekera, lauded DFCC Bank for its leadership in entering the green finance space, describing it as a bold move that signals the nation’s commitment to environmental sustainability. He remarked,
“Today, we are not just ringing the bell for a new financial product, we are taking a decisive step towards a greener nation.”
DFCC’s green bond issuance was met with overwhelming investor interest, being oversubscribed, reflecting a strong demand for sustainable and environmentally friendly investment options.
Wijesekera added that the CSE offers numerous fundraising avenues and expressed his optimism that more companies will follow DFCC’s example in exploring green finance initiatives.
On a global scale, sustainable bond issuance surpassed a trillion dollars in 2023, driven by record green bond sales. Sri Lanka’s entry into this growing market aligns it with international efforts to combat climate change and promote environmental responsibility.
The move represents an invaluable opportunity to attract responsible investments that not only enhance the resilience of the capital market but also encourage businesses to innovate and adopt eco-friendly practices.
DFCC Chairman, Jegan Durairatnam, noted that the bank has a long history of introducing pioneering financial solutions, with green bonds being the latest in its line of innovative offerings.
He stressed that the bank’s efforts to promote this product included one-on-one meetings with potential issuers, organising forums and technical workshops, and collaborating with international agencies such as the ADB, IFC, UNDP, and the French Embassy.
