5000 Lankan industries hit Rs 5 Bn green fund jackpot

December, 6, 2017

More than 5000 Sri Lankan industries have secured country's first large scale green funding initiative aimed solely at their manufacturing sector-including the SME industries. A massive Rs 5 Bn in funds are to be channelled through 11 leading financial institutions-which includes nine commercial banks.

“Many industries including small and micro industries did not receive sufficient funds and did not have pollution control measures. The SMILE Loans help the industries and industrial entrepreneurs to commence their green initiatives and perform environmentally friendly steps” said Minister of Industry and Commerce Minister of Sri Lanka Rishad Bathiudeen on 6 December. Minister Bathiudeen was addressing the Environmentally Friendly Solution Revolving Fund Loan Scheme organized by the Project Management Unit under his Ministry at Colombo 3 on 6 December. Minister Bathiudeen was joined by his State Minister Champika Premadasa and Secretary of Ministry of industry and Commerce N. Ranjan Ashoka. The scheme will provide more than 5000 Lankan industries low cost loans (at 6.5% per annum) at a total Rs 5.2 Bn for the next 3-5 years for their industry upgrades related to green and environment friendly initiatives. 9 commercial banks including BoC, Commercial Bank, People’s Bank, DFCC and RDB as well as two financial institutions act as Participating Credit Institutions (PCI) in this venture.

“Modern Industrial development efforts unlike in the past requires a sustainable approach. The Unity government’s economic reforms therefore focus on the UN’s Sustainable Development Goals (SDG) framework. We have recently signed the 2018 – 2022 UN Sustainable Development Framework (UNSDF) agreement with the UN. The Sri Lankan SDG targets are moved forward along this and implemented in many ways. Firstly improved data and knowledge management secondly strengthening of public institutions for lasting peace thirdly socio economic resilience and finally resilience to climate change and disaster” said Minister Bathiudeen, and added: “Sri Lanka’s reform efforts are being developed under the 2018 – 2022 UNSDF that this government signed recently. UN’s SDG framework also focuses on sustainable environment practices as well. In fact the Ministry of Industry and Commerce with UNIDO has recently commenced SDG 9 framework for industries. There is no doubt that E-Friends-2 loan scheme launched today can also help us in this. The earlier general loan scheme before e-Friends scheme was implemented first in 2004 and was completed in 2010. As per the agreement between the Government of Sri Lanka and Japan Bank for International Corporation re-lending of re-paid loans was allowed. Accordingly PMU has started implementing this scheme to provide loans for entrepreneurs and industries throughout Sri Lanka at low interest rates. Since the early 1970s international donors have supported and initiated environmental programs in Sri Lanka and support was given to our industries. However many small and micro industries did not receive sufficient funds and did not have pollution control measures especially those established before 1990. Our industries are concerned about reducing environmental pollution but they lack funds to implement green initiatives or to prevent industrial pollution. This loan scheme helps the industries and industrial entrepreneurs to commence their green initiatives and perform such environmentally friendly steps. In that today we are introducing a proper system of funding through the Project Management Unit under my Ministry for our industries to overcome funding problems in their environment related industry development. We are planning to distribute more than Rs 5 billion under this scheme to more than 5000 industries in the next 3-5 years.”

In this first ever green financial industry initiative in Sri Lanka, each qualifying industry is entitled to get a maximum loan of Rs 30 Million at a low interest of only 6.5% in the next 3-5 years.

Photo - Sri Lankan Minister of Industry and Commerce Rishad Bathiudeen (third from right) with his Ministry Secretary KDN Ashoka (second from right) and his State Minister Champika Premdasa (far right) witnesses green loan agreement by hi Ministry with one of the credit institutions (BoC-reps second from left) in Colombo on 6 December.