By: Staff Writer
Colombo (LNW):The Government Is now turning to green finance by gaining funds gained from green bond issues as it can be used for renewable energy, energy efficiency, green buildings, clear transportation, sustainable water & waste water management, pollution prevention, governance and circular economy.
The other ares are the adaptation to climate change, conservation of biodiversity and sustainable management of natural conservation of biodiversity and sustainable management of natural resources and land use.
The United Nations Economic and Social Commission for Asia (UNESCAP), United Nations Development Program (UNDP) and Global Green Growth Institute (GGGI) have agreed to support the government in establishing an internationally recognized framework for accessing finance through green/blue and sustainable financial instruments and a green bond framework has now been drafted accordingly.
As such, the Cabinet of Ministers approved the proposal presented by the. President in his capacity as the Minister of Finance to obtain a second party opinion (SPO so as to make the Green Bond Framework that has been drafted into a valid document.
This initiative will be implemented with the support of the United Nations Economic and Social Commission for Asia (UNECSAP), United Nation’s Economic and Social Commission for Asia (UNESCAP), United Nation’s Economic and Social Commission for Asia (UNESCAP) and Global Green Growth Institute (GGGI).
Making Sri Lanka’s long delayed ambitious forex raising endeavour a reality, the Colombo Stock Exchange (CSE) has introduced the initiative of listing and trading of Green Bonds for the first time in the Sri Lankan stock market, with effect from 25th April 2023.
Under the Green Bonds concept, proceeds are invested exclusively in green projects that generate climate or other environmental benefits.
Among these projects are renewable energy, energy efficiency, sustainable waste management, sustainable land use (forestry and agriculture), biodiversity, clean transportation, and clean water.
In an earlier attempt the Government was planning to issue green bonds in July 2022 in order to raise US $ 2 billion under forex raising initiative of former CB Governor Ajith Nivard Cabraal prior to the declaration of preemptive debt default by present Governor Nandalal Weerasinghe on 12 April 2022, official and media reports revealed.
This plan to issue $ 2 billion in green bonds around July 2022 had been in the pipeline, but was postponed following the sudden declaration of preemptive debt default but its still on the cards
Green bonds are fixed-income Government securities issued under the promise of using the capital raised to wholly or partly finance projects and activities promoting a broad range of environmental objective
During Mr Cabraal’s tenure as CB Governor Sri Lanka had been seeking to issue $ 1 billion worth of green bonds in July 2022 and another $ 1 billion in September 2022.
This was part of over $ 10 billion in inflows targeted during 2022, not inclusive of the inflows targeted under the previous six-month plan, which largely failed to materialize following debt default