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Accelerating Sustainable Finance in SL through private sector participation

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Sri Lanka declared its commitment to achieving the 17 Sustainable Development Goals (SDGs) in 2015. Since then, the country has made several national pledges and commitments to achieve environmental, social and economic goals in line with the SDGs. These ambitious commitments require greener and more sustainable capital markets and financial systems and a private sector investing in environmental and social priority sectors.

While the link between climate-related goals and finance may not be immediately apparent, the financial sector is an important leverage point for a sustainable transformation. Investments aligned with a country’s climate goals can make an important contribution to environmental and climate protection.

In line with the current and evolving global and regional trends and opportunities, accessing the untapped potential of the sustainable finance market can only be done through empowering financial sector institutions and corporate leaders through comprehensive competence and knowledge development on climate-relevant issues and priorities and their interrelationships with the financial sector and investment choices.

Environment, Social and Governance (ESG) is often used in business as a key metric in making investment decisions and also serves as a reference for companies reporting the impacts of their businesses. ESG has become a globally recognized consideration in investment decision-making and is increasingly the focus of companies’ strategic and operational agendas. With issues such as climate change, ethical supply chains, environmental damage and global welfare becoming more critical, investors and regulators are now focused on ESG aspects that positively contribute to solving current global issues.

Many economies, especially in Asia, have implemented different policies to incentivize the private sector to issue green bonds. In Asia and the Pacific, financial entities are the main issuers of green bonds having a 50% share in the market compared to 17% share of the governments. Global cooperation and international standardization have had a positive impact on the issuance of private green bonds.

Countries like Indonesia have implemented a series of sustainable finance initiatives as an effort to create an inclusive and globally competitive capital market. The Indonesia Stock Exchange (IDX), became a part of the Sustainable Stock Exchanges and launched ESG focused indices, aiming to improve the transparency of listed companies’ ESG performance and to drive the implementation of SDGs as a part of Investor’s decision-making process.

Recent research has found that green investments significantly contribute to businesses’ green innovation. Therefore, in addition to bridging the SDGs funding gap, a sustainable capital market will facilitate green innovation, which is fundamental to keeping pace with the global economy.

In view of above, a 3-day Sustainable Finance training targeting the private sector stakeholders was successfully conducted recently by the Central Bank of Sri Lanka in partnership with the Sustainable Development Council, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), the Global Green Growth Institute (GGGI) and the Luxembourg Green Exchange (LGX) and LGX Academy (the world’s first and leading exchange dedicated to sustainable finance) in Colombo.

The objective of the training was to support the private sector in developing a better understanding of sustainable finance instruments, best practices on compliance, and ESG risk identification and management. To build staff capacity in both government and the private sector to understand sustainable finance as a distinct segment of the market, increased awareness of various emerging asset classes, and enhanced cooperation between the public and private sectors are citical. Strong links between financial markets and key actors in the real economy can create an enabling environment that looks at sustainable finance as the new business-as-usual.

Delivering the Opening Remarks at the event, the Senior Deputy Governor of the Central Bank, T. M.Y.J.P Fernando stated that sustainable finance has ceased to be a mere aspiration; it has become a necessity and as the main regulator of the financial sector, the Central Bank is committed to creating an enabling environment for the advancement of sustainable finance in Sri Lanka through laying the necessary foundations and the private sector must build upon the initiatives and drive the momentum forward, benefitting from efforts of the financial sector institutions to green the economy.

Speaking at the event, the Director General of the Sustainable Development Council, Chamindry Saparamadu highlighted that developing greener and sustainable capital markets and financial systems and channeling private capital flows towards environmental and social priorities are vital to achieve country’s development goals whilst remaining within the planetary boundaries. Ms Saparamadu further noted that this requires all key stakeholders ie regulators, financial sector institutions, and corporate leaders to work with a shared vision and understanding.

The training was attended by representatives from Banks, Non-bank Financial Institutions, Insurance Companies, leading Business Chambers and officials from the Central Bank and the Securities and Exchange Commission,



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Environmental devastation seen as precipitating economic crisis in Northern Sri Lanka

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Environmentalists and officials on an on-sight tour in Sri Lanka’s North.

As parched soil cracks underfoot and once-thriving fields lie fallow, the farmers of Mannar are living on the frontlines of a crisis that is no longer just environmental — it’s economic. Climate change has tightened its grip on this northern region, and with each failed monsoon and dwindling harvest, the livelihoods of entire communities are evaporating.

The Centre for Environmental Justice (CEJ), along with local stakeholders, has raised urgent concerns over the increasingly hostile conditions faced by farmers in the region. At the heart of the problem are erratic weather patterns — prolonged droughts, unpredictable rainfall, and extreme heat — all of which disrupt the delicate balance required for traditional farming practices.

“The erratic weather patterns triggered by climate change are not only drying up water sources but also pushing already vulnerable farming communities deeper into poverty, Dilena Pathragoda, Executive Director, CEJ told The Island Financial Review.

He added: “The economic consequences are severe — from crop failures to loss of livelihoods — and without timely interventions and climate-resilient strategies, the long-term sustainability of agriculture in regions like Mannar is in jeopardy.”

In 2024 alone, nearly 3,000 acres of paddy land in Mannar District were left uncultivated due to lack of water, according to data from local agrarian offices.

In other words, this represents an estimated loss of over Rs. 225 million in potential harvest income, based on average yields and market prices. Farmers who once cultivated rice, onions and vegetables with predictable seasonal success now face devastating uncertainty.

The failure of rain-fed tanks (reservoirs) and the drying up of canals have made irrigation nearly impossible in some areas. In Nanattan and Musali divisions, water availability dropped by some 60 per cent compared to historical averages. As water becomes scarcer, so do incomes, leading many families to take on debt or abandon agriculture altogether in search of daily-wage labour.

This agricultural downturn is having ripple effects throughout the local economy. In Mannar, where over 60% of households depend directly or indirectly on farming, the collapse of agricultural productivity has led to rising food prices, shrinking local markets, and reduced cash flow for small businesses. Fertilizer vendors, seed suppliers and even transport workers are reporting significant losses.

“Some farmers have seen their seasonal incomes drop from Rs. 200,000 to under Rs. 50,000, noted one local agriculture officer. “Many are defaulting on informal loans and are now relying on relief aid to survive.”

Economists warn that this trend, if unchecked, could contribute to broader socio-economic instability. Rural depopulation, youth migration, and heightened inequality are already being observed in vulnerable districts. Women, in particular, face added burdens as household food security becomes more precarious and access to clean water requires greater physical labor.

Despite these challenges, experts insist that solutions are within reach. Climate-resilient farming techniques — such as drip irrigation, drought-tolerant crops, and community-managed water systems — have shown promise in pilot projects across other dry zones. However, scaling these up requires political will, coordinated planning, and substantial investment.

Environmental advocates also call for a shift in national agricultural policy. “Rather than pouring money into outdated infrastructure or monoculture subsidies, Sri Lanka must pivot towards sustainable, adaptive farming models, said Pathragoda. “This includes better support for farmers’ education, access to technology, and integrated land and water management.”

Civil society groups, including CEJ, are urging both the government and international donors to treat the Mannar crisis as a wake-up call. Climate finance mechanisms, they argue, must be made accessible to grassroots communities, not just large-scale development firms. Moreover, climate justice must take center stage — recognizing that those suffering most have contributed least to the global emissions causing these disruptions.

As Sri Lanka navigates an uncertain economic recovery, ensuring food security and rural resilience is more than an environmental imperative — it’s a matter of national stability, Pathragoda stressed.

By Ifham Nizam

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CSE and NCE partner to empower Sri Lankan exporters

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The Colombo Stock Exchange (CSE) and the National Chamber of Exporters of Sri Lanka (NCE) entered into a strategic partnership to support Sri Lankan exporters by enhancing their access to capital market opportunities and broadening visibility for their businesses.

The partnership agreement was signed by Shiham Marikar, Secretary General / CEO, The National Chamber of Exporters of Sri Lanka, and Ms. Vindhya Jayasekera, Chief Executive Officer Designate, CSE. The signing ceremony was attended by Ms. Dilini Gamlathge, Assistant Director, Member Services/Operations, The National Chamber of Exporters of Sri Lanka; Ms. Punyamali Saparamadu, SVP Commercial, CSE; Ms. Himashi Wickramasinghe, Manager, Commercial, CSE; Ms. Shivandini Liyanage, SVP, Legal, Enforcement and Compliance, CSE; and Kanishka Gunawardana, Manager, Enforcement and Compliance, CSE.

This partnership with the CSE will provide NCE members—both experienced exporters and aspiring ones—with access to vital capital market knowledge and services to support their business expansion efforts.

This collaboration aims to offer exporters tools and resources to strengthen their market presence and growth potential. It also creates a platform for SMEs within the export sector to consider listing on the Colombo Stock Exchange, particularly through the Empower Board—dedicated to facilitating capital raising for small and medium-sized businesses.

Through this partnership, CSE will also gain direct access to a network of established exporters, enhancing the reach of capital market education, awareness-building, and strategic financing solutions among key players in Sri Lanka’s export economy.

The collaboration will further enable opportunities for joint forums, knowledge-sharing sessions, and networking events, providing exporters with guidance on alternative avenues for capital generation and highlighting the benefits of corporate good governance and transparency through listing.

This partnership adds credibility to the CSE and NCE’s shared efforts and signals trustworthiness to potential stakeholders, offering significant advantages for fostering growth, strategic opportunities, and long-term development within Sri Lanka’s export sector.

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A case for a visa-free tourism regime in SL

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Nihal Perera: “Visa-free travel needed.”

Sri Lanka should not have any restrictions for tourist arrivals and a visa-free regime is the need of the hour to woo more visitors, said travel and aviation expert Nihal C.B. Perera.

The founder of a family-owned company in Sri Lanka, Sparklink Travels, Perera said that Sri Lanka should offer the same ‘Visa Free facility’ initiated by Singapore and now successfully implemented by Thailand.

A former Ceylon Tourist Board, Development and Publicity Director, he said that during his time, they leased or gave several unused state land areas to build hotels. “But we told the investors that the construction has to start in six months, and this happened.”

One such venture was the opening of the Pegasus Reef Hotel at Wattala.

Perera also initiated the creation of special tourism zones in Bentota, Hikkaduwa and several other areas.

After a nearly 15-year stint at the Tourist Board, he formed his own travel company, Sparklink Travels, in 1979 with just 4 employees. “With the rapid expansion of business, and being recognized as an IATA-accredited travel agency, we increased our employee strength and moved into our own four-storey building in Bambalapitiya. We also opened a branch in Australia, he said.

“After the COVID pandemic, we also negotiated with airlines and refunded all passenger tickets purchased and cancelled due to COVID-19, Perera explained.

He recalled the days when people were issued small booklet-type air tickets and how his staff had to visit the airline offices to collect them. Perera added: “The online has changed these and I think this is a time-saving move.

“Unlike two decades ago, online and payment gateways have enabled people to book their own air tickets from home and we too have changed our strategies to find new businesses.”

Today, Sparklink Travels continues with his son Praki Perera, heading the company’s operations in Sri Lanka and Australia.

Their dedication ensures that the company remains a premier provider of air travel, cruises and tours, with professional services tailored to enhance the true essence of travel.

Perera, who has been a pioneering force in Sri Lanka’s tourism sector, was also honored as a ‘Tourism Legend’ at the annual industry awards.

By Hiran H. Senewiratne

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