Central Bank of Sri Lanka Launched the Sri Lanka Green Finance Taxonomy
The Central Bank of Sri Lanka launched the Sri Lanka Green Finance Taxonomy at the John Exter International Conference Hall of the Central Bank on 06 May 2022.
The Sri Lanka Green Finance Taxonomy is a classification system, which defines and categorizes economic activities that are environmentally sustainable, and is a key action item outlined in the Roadmap for Sustainable Finance of Sri Lanka introduced by the Central Bank in 2019.
The Taxonomy has been prepared in line with the international best practices, while harmonizing for local context, hence it is expected to enable financial market participants to raise low-cost funding for green activities through both domestic and foreign markets.
The Sri Lanka Green Finance Taxonomy would be applicable to all domestic and foreign market participants offering financial products (such as bank lending, debt instruments, portfolio management, and investment funds), large corporations, as well as national and local government bodies.
It can also be used as a reference by the industrial planning authorities and served as the basis for local governments to support green industries covering a range of economic activities such as Forest and Logging, Agriculture, Manufacturing, Electric power generation, Transmission and distribution, Gas, steam and air conditioning supply, Water supply, sewerage and waste management, Construction, Transportation and storage, Financial services and Tourism and recreation.
The Sri Lanka Green Finance Taxonomy was developed with the technical and financial assistance of the International Finance Corporation (IFC), and the process was facilitated through the Sustainable Banking and Finance Network (SBFN) and the IFC Green Bond Technical Assistance Program (GBTAP).
A panel of international technical experts with the help of local experts namely Dr. Thusitha Sugathapala of University of Moratuwa and Dr. Madurika Nanayakkara of University of Kelaniya and the officials of the Central Bank contributed in devising the Taxonomy. Drafting of the Taxonomy involved an extensive consultation process with multiple stakeholders, including various government ministries, financial institutions, financial industry associations, other financial sector regulators, and professional service provider firms.