DFCC Bank secures $12 m for Green Financing in Sri Lanka

DFCC Bank has supported businesses that aim to grow while minimising their environmental impact for years. Now, with a new US$12 million funding facility from European impact investment platform Symbiotics, the bank is scaling up that effort - this time with a focus on solar energy and small businesses across Sri Lanka, it said in a media release.

The funding, split between a $6.25 million tranche and an equivalent of $5.75 million in Sri Lankan Rupees, will be used to support renewable energy projects. Much of it will be allocated to small and medium-sized enterprises that adopt clean energy solutions as part of their long-term strategy.

Symbiotics arranged the financing, with bonds issued specifically for DFCC Bank and listed on the Securities Official List of the Luxembourg Stock Exchange (with an International Securities Identification Number - ISIN). TSW Capital Services Pvt Ltd., based in India, advised DFCC Bank on the transaction.

“This funding enables us to direct international capital into local projects that matter - clean energy, small businesses, long-term growth,” said Prins Perera, Senior Vice President – Treasury, Investment and Wholesale Banking at DFCC Bank. “It reflects trust in our financial profile and ability to deliver sustainable impact, even in a competitive funding environment.”

He further noted that this borrowing secured from the European market was at a time when access to external funding was particularly constrained for the country. What makes this transaction even more noteworthy is that a portion of the loan was drawn down in Sri Lankan Rupees. This is significant, as external funding is typically received in foreign currency, while the underlying projects are often executed in LKR. Consequently, the borrowing institution must implement effective and cost-efficient foreign exchange risk mitigation strategies to ensure that end-users can access funding at a competitive rate. This initiative by the bank sets a valuable precedent for other financial institutions to follow.

The loan aligns with Sri Lanka’s target of generating 70 per cent of its electricity from renewable sources by 2030. It also supports the UN Sustainable Development Goal on Affordable and Clean Energy (SDG 7) by helping improve access to clean power through longer-term, more affordable financing.