The Securities and Exchange Commission of Sri Lanka (SEC) and The Colombo Stock Exchange (CSE), in collaboration with the Asian Development Bank (ADB) hosted an issuer forum titled “Towards a Greener Horizon: Unlocking Opportunities through Sustainability Bonds” recently in Colombo. The forum was aimed at enhancing awareness and building capacity among stakeholders including representatives from Government Authorities, State-Owned-Enterprises, potential issuers, investment banks/corporate finance advisors, verification/assurance providers, rating, and other agencies to create the foundation for a sustainable bond ecosystem in Sri Lanka.
Delivering the opening remarks, Mr. Faizal Salieh, Chairman of the SEC said, “The challenge is how quickly Sri Lanka can socialize these bonds and attract ESG-conscious foreign investors, while being mindful of Sri Lanka’s default sovereign rating hurdle.” He highlighted the need to build an ESG-conscious local investor base, stating, “It is critical that all stakeholders come together, work together, and support one another to kick-start issuances.”
Furthermore, he stated, “By expanding the availability of green finance instruments and fostering collaboration between investors, issuers, and regulators, financial markets will be able to accelerate the transition to a more sustainable and resilient financial system.”
Mr. Chinthaka Mendis, Director General SEC expanded on this by saying, “This mechanism would reduce the burden on government budgets while leading to a more inclusive participation from all spectrums of the country.”
He further elaborated on how other countries have utilized such products to foster national development, highlighting Thailand as a prime example where the country has extensively explored and benefitted from sustainable products offered through the capital market. He pointed out, “After the COVID-19 pandemic, the Thai Government has utilized funds raised through sustainable products and sustainable infrastructure products for development sectors such as renewable energy, sustainable transport, sustainable water management, and sustainable waste management.”
Next, speaking on behalf of ADB, it’s Country Director, Mr. Takafumi Kadono stated “Promoting sustainable capital market development is one of the key components of our work to promote sustainable recovery, build resilience, and enhance inclusive growth in Sri Lanka. We are honoured to be able to share ADB’s experience in this area, highlight successful case studies, and discuss resources available to support sustainable bond issuances in Sri Lanka.”
Addressing the participants Mr. Rajeeva Bandaranaike, Chief Executive Officer of the CSE said, “Today, we convene at a critical juncture in Sri Lanka’s capital market evolution. This event aims to catalyse action and create pathways for sustainable finance through Green, Social, and Sustainable Bonds.”
He further said, “Global supply chains are pivoting towards environmental sustainability, with net-zero initiatives becoming industry standards. As a country which needs to focus on exports, embracing these environmental policies is not just a moral imperative but a commercial necessity to maintain our competitive edge. By fostering a sustainable financial ecosystem, we pave the way for local businesses to access sustainable capital, enhancing resilience to climate risks and fostering a greener future.”
This forum was enriched by several presentations aimed at providing the participants with a comprehensive overview of the depth of opportunities available in sustainable finance, while placing a spotlight on the development and issuance of sustainability bonds.
Highlights included discussions on the global overview of green bonds, latest developments, lessons learnt in developing sustainable finance ecosystems, an elaboration of the technicalities and intricacies in issuing GSS Bonds, case studies, the CSE regulatory framework for Sustainable Bonds, and the DFCC Bank PLC sharing their experience on raising a green bond.
The forum also featured a panel discussion including Mr. Chinthaka Mendis, Director General, SEC; Mr. Kosintr Puongsophol, Senior Financial Sector Specialist, ADB; Mr. Karthik Iyer, External Consultant at ADB; Mr. Renuke Wijayawardhane, Chief Regulatory Officer, CSE; as well as Mr. Nalin Karunathilake, Vice President – Sustainability & Consulting, DFCC Bank PLC; with Ms. Uresha Walpitagama, Financial Sector Specialist, ADB (Chairperson) serving as the moderator. Following the panel discussion and a Q&A session, attendees reported finding the event valuable for its insightful perspectives.