In a concerted effort to bolster sustainable investments in Sri Lanka, the International Finance Corporation (IFC) and the European Union (EU) have joined forces with the Commercial Bank of Ceylon (CBC) to enhance green finance initiatives, aligning with the country’s goals for a low-carbon future.
Under the framework of the EU’s regional initiative ‘Accelerating Climate Smart and Inclusive Infrastructure in South Asia (ACSIIS)’, the partnership seeks to facilitate CBC’s transition towards net-zero emissions. Leveraging IFC’s expertise, CBC aims to expand its green financing portfolio, diversifying into sectors like blue finance and supporting green Small and Medium Enterprises (SMEs).
Sanath Manatunge, Managing Director/Chief Executive Officer of Commercial Bank, emphasized the strategic importance of climate transition, stating, “The formulation of a robust climate transition strategy stands as a pivotal component within Commercial Bank’s strategic roadmap. We are delighted to engage the expert advisory services of IFC to effectively realize this critical initiative.”
Sri Lanka, susceptible to the impacts of extreme weather events, faces a projected 1.2 percent annual Gross Domestic Product (GDP) loss by 2050 due to climate change, according to the World Bank. As such, addressing climate risks has become a national imperative, with commitments to reduce greenhouse gas emissions and increase renewable energy sources in electricity generation.
IFC’s Vice President for Asia and the Pacific, Riccardo Puliti, affirmed the organization’s commitment to supporting Sri Lanka’s green finance agenda: “IFC will continue to assist Sri Lanka in developing and scaling up green finance to support the country in its path to a net-zero future.”
Recognizing the pivotal role of financial institutions in promoting sustainability, IFC has been instrumental in fostering green finance in Sri Lanka, including support for the development of the nation’s first green finance taxonomy. By expanding its green finance portfolio, CBC aims to set a precedent for other financial entities, emphasizing the importance of climate-resilient investments.
Carmen Moreno, Ambassador of the EU to Sri Lanka, lauded the initiative, highlighting its alignment with the EU’s Global Gateway strategy: “Expanding the Commercial Bank of Ceylon’s green portfolio will provide better access to green finance, which is crucial for stimulating sustainable, economic growth.”
IFC’s longstanding partnership with CBC, dating back to 2003, has yielded substantial investments and advisory support. In 2017, IFC injected $100 million into CBC to bolster lending for renewable energy and energy efficiency projects. Additionally, CBC is one of the beneficiaries of a $400 million cross-currency swap facility aimed at facilitating essential imports.
The collaboration between IFC, EU, and CBC underscores a commitment to sustainable development, positioning Sri Lanka on a trajectory towards cleaner energy, enhanced resilience, and a more sustainable future.
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