IFC, a member of the World Bank Group, signed a Memorandum of Understanding (MoU) with the Central Bank of Sri Lanka (CBSL) to enhance and develop environmental and social risk management and sustainable financing practices for Sri Lanka’s financial sector, an important step in IFC’s global efforts to promote sustainable finance.

As a new member of IFC’s Sustainable Banking Network (SBN), the Central Bank will benefit from the experience and knowledge of other members, while receiving technical support in green finance from IFC, a global leader in environmental and social standards.

Sri Lanka is unique, with 18 banks already adopting 11 voluntary principles, under the leadership of the Sri Lanka Banks’ Association. The MoU signed by both parties provides a clear vision for cooperation and a commitment to a path forward for the sustainable finance journey in Sri Lanka.

“We see a great opportunity for Sri Lankan banks to support greener, cleaner projects aligned with climate change impacts. We also welcome the cooperation and technical expertise shared by IFC and the Sustainable Banking Network,” said Dr. Indrajit Coomaraswamy, Governor, Central Bank of Sri Lanka.

Under this partnership, the Central Bank will collaborate with SBN to develop a sustainable finance roadmap to guide the local banking and finance industry; strengthen the capacity of the banking sector to implement such practices; facilitate knowledge sharing with other SBN members; and promote green investment in the island nation.

“IFC and the SBN experience has demonstrated how important it is to adopt practices that put environmental, social and corporate governance considerations at the center of efforts to build stable and responsible financial systems,” said Amena Arif, IFC Country Manager for Sri Lanka and Maldives. “We are excited to partner as Sri Lanka looks to become a regional and global leader in sustainable finance.”

The IFC-supported Sustainable Banking Network (SBN) is working with associations and regulators to level the playing field for banks and encourage green investment. To date, 15 SBN member countries have launched sustainable finance polices, guidelines and roadmaps.