• Approval allows for future green bond issuance upon capital market return
• Announcement pending cabinet approval, with market return projected for 2027

Sri Lanka has received the mandatory second party opinion for its green bond framework, which is required to sell the bonds, Bloomberg reported.

Speaking at a forum organised by the Asian Development Bank (ABD) in Colombo on Wednesday (19), Finance Ministry Additional Director General Visakha Amarasekera confirmed that the country has received this second party opinion.

Amarasekera said that a formal announcement will be made after cabinet approval in the coming weeks.

She added that Sri Lanka can use the framework to sell green bonds once the country is ready to return to capital markets.

According to Sri Lanka’s ongoing International Monetary Fund (IMF) loan programme, the earliest the nation is projected to tap international capital markets is 2027, where the country can borrow $ 1.5 billion to close the external financing gap.

Last July, the Central Bank of Sri Lanka (CBSL) signed a deal with the World Bank’s International Finance Corporation (IFC) to receive financial and technical assistance on developing its sustainable finance strategy.

The CBSL said the programme would allow it to update the green finance taxonomy it first released in 2022 to help ascertain the sustainability of different business activities in Sri Lanka.

The central bank has already been developing a sustainable finance roadmap since 2019 with technical support from the IFC.

It has issued guidelines two years ago that encourage licensed banks to start using green bonds and invest in sustainable activities, which most of the listed commercial banks have raised funds.