DFCC Bank issues first listed Green Bond in Sri Lanka

DFCC Bank has emerged as the first institution in Sri Lanka to issue a Senior, Rated, Unsecured, Redeemable Green Bond.

“This landmark move underscores its commitment to fostering environmental stewardship and promoting renewable energy. Subject to receiving approval, this historic bond issue will soon be made via an Initial Public Offering and listed on the Colombo Stock Exchange. It thus represents a significant boost for the nation's solar energy sector, as the proceeds are earmarked exclusively for renewable solar energy projects that generate substantial environmental benefits,” the bank said in a media releas.

Thimal Perera – Chief Executive Officer (CEO) of DFCC Bank – remarked on the occasion's significance, saying, "This milestone underscores our commitment to sustainability and marks a pivotal moment for Sri Lanka's financial sector. With this first issue of a Green Bond, we are creating a new avenue for responsible investment – an initiative that aligns with our long-term vision of fostering economic growth through environmentally sustainable practices. By supporting the solar energy sector with this issue, we invest in a cleaner, brighter future for future generations. We invite the public to consider subscribing to DFCC Bank's Green Bond issue and supporting our shared vision for a green economy while securing a substantial return on their investment."

The initial public offering of DFCC Bank's Green Bonds is expected to raise up to Rs.2.5 billion, with an initial issue of Rs.2 billion and an option to raise an additional Rs500 million in the event of oversubscription. The price per bond is set at Rs.100 and the minimum subscription requirement is set at 100 bonds or Rs.10,000 or multiples thereof. The bonds are classed as Type A, with a tenure of 03 years and a fixed interest rate of 12 per cent per annum, with annual interest payouts and a bullet capital repayment at the end of the bond's tenor.

The Colombo Stock Exchange has significantly facilitated the trading of these Green Bonds, which it classes as "innovative financial instruments where the proceeds are invested exclusively in green projects that generate climate or other environmental benefits, for example in renewable energy, energy efficiency, sustainable waste management, sustainable land use (forestry and agriculture), biodiversity, clean transportation and clean water." These bonds will be traded and settled in a manner identical to conventional bonds to ensure consistency and convenience for investors.