Sri Lanka’s Roadmap for Sustainable Finance sets out an ambitious agenda to develop the country’s sustainable finance market, by focusing on the development of tools and policy guidance that is needed to effectively manage environmental, social and governance (ESG) risks and meet the country’s climate objectives. The roadmap sets out key priorities, such as the development of a Green Finance Taxonomy which was launched in May 2022. The roadmap also sets the objective of adopting international standards on sustainable bonds, and developing the necessary domestic guidance and operational tools.
Despite these ambitions, the current economic crisis in Sri Lanka is threatening the socio-economic development and achievement of the SDGs. In 2022, Sri Lanka's sovereign credit rating was downgraded, further constraining its access to international financial markets. While the government is working with the IMF and other creditors to urgently address the crisis and regain debt sustainability, the next several months will be critical. At the same time, Sri Lanka is looking forward to a time when debt sustainability levels are stabilized, and the country can move forward in achieving its sustainable finance vision.
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) is supporting the Government of Sri Lanka in achieving its long-term vision by 1) providing training to government and private sector stakeholders on green and blue bond issuance and 2) supporting the Ministry of Finance and Central Bank in the development of the country’s sovereign green / blue bond framework. It should be noted that while access to international capital markets is not currently an option, debt restructuring in the form of debt-for-climate swaps through the issuance of a highly guaranteed blue bond could be a more immediate option. Therefore, this training and policy support is timely to allow the Government of Sri Lanka to have the policies and skills in place to draw on a range of financing options.
Sustainable Thematic Bond Issuance Training co-hosted by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the Ministry of Finance, Economic Stabilization and National Policies. Additionally, to run this training course, ESCAP is partnered with the Luxembourg Green Exchange (LGX) and LGX Academy, the world’s first and leading exchange dedicated to sustainable finance. The training aims to increase the capacity of future bond issuers and relevant Ministry stakeholders that are part of the sovereign issuance process.