EU-backed initiative boosts Sri Lanka’s green bond market

The European Union‑funded Green Recovery Facility, implemented by Expertise France, is conducting a targeted capacity-building programme to strengthen national coordination of GSS+ bonds in Sri Lanka. 

It is part of a 200,000 euro initiative under the Facility, in collaboration with the Securities and Exchange Commission of Sri Lanka (SEC), Colombo Stock Exchange (CSE), Finance Ministry, and central bank. 

“When Sri Lanka develops a strong market for green and social bonds, both sides gain. Sri Lanka unlocks longer‑term finance for its transition, and European investors gain reliable, climate‑aligned opportunities in a key partner economy,”  Dr Johann Hesse, the Head of Cooperation at the EU Delegation, said. 

The initiative brings together over 160 participants, including senior executives and technical professionals from financial institutions, and combines a high-level C-suite session with a two-day Training of Trainers programme focused on bond structuring, issuance processes, and investor engagement. 

It is expected to create a multiplier effect across the sector, reaching over 300 professionals. 

The Green Recovery Facility is a 5 million euro initiative that helps the government and businesses identify key actions in areas such as sustainable energy, circular economy, climate action, and sustainable finance. 

The EU is fostering green investment in Sri Lanka in line with its Global Gateway strategy, and supports the development of the green bond market to channel private finance into climate‑resilient and sustainable projects. 

This has helped improve market frameworks, enhance institutional capacity, and build investor confidence in Sri Lanka’s sustainable finance landscape. 

The initiative plays a central role in strengthening Sri Lanka’s Green, Social, Sustainability and Sustainability-Linked (GSS+) bond market. 

It works with the CSE and technical partners to align local issuances with international standards. 

“As a result, recent GSS+ bond issuances have mobilised approximately LKR 85 billion (EUR 186 million), financing priority sectors, including renewable energy, energy efficiency, water and coastal resilience, and inclusive social infrastructure. Several of these issuances were oversubscribed, reflecting growing market demand,” the Delegation of the European Union to Sri Lanka said. 

Sri Lanka’s regulatory environment has also been strengthened with the introduction of the GSS Bonds Regulatory Framework in 2025, improving transparency and positioning the country more competitively in international capital markets.