5,000 Lankan industries hit Rs. 5 b green fund jackpot

Sri Lankan Minister of Industry and Commerce Rishad Bathiudeen (third from right) with his Ministry Secretary K.D.N. Ashoka (second from right) and his State Minister Champika Premadasa (far right) witnessing the green loan agreement of the Ministry of Industry and Commerce with one of the credit institutions, Bank of Ceylon, in Colombo yesterday

More than 5,000 Sri Lankan industries have secured the country’s first large-scale green funding initiative aimed solely at their manufacturing sector, including SME industries. 

A significant Rs. 5 billion in funds is 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 industries and industrial entrepreneurs to commence their green initiatives and perform environmentally friendly steps,” said Minister of Industry and Commerce Minister Rishad Bathiudeen. 

Minister Bathiudeen was addressing the Environmentally Friendly Solution Revolving Fund Loan Scheme organised by the Project Management Unit under his Ministry at Colombo 3 yesterday. Minister Bathiudeen was joined by his State Minister Champika Premadasa and the Secretary of the Ministry of Industry and Commerce N. Ranjan Ashoka. The scheme will provide more than 5,000 Lankan industries with low-cost loans at 6.5% per annum at a total of Rs. 5.2 billion for the next three to five years for their industry upgrades related to green and environmentally friendly initiatives. Nine commercial banks, including Bank of Ceylon, Commercial Bank, People’s Bank, DFCC and Regional Development Bank as well as two financial institutions acting as Participating Credit Institutions (PCI), are involved in this venture.

“Modern Industrial development efforts, unlike in the past, require 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 the strengthening of public institutions for lasting peace, thirdly socioeconomic resilience and finally resilience to climate change and disaster,” said Minister Bathiudeen. 

“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 the SDG 9 framework for industries. There is no doubt that the E-Friends-2 loan scheme launched today can also help us in this. The earlier general loan scheme before the 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 cooperation, the relending of repaid 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. Our industries are concerned about reducing environmental pollution but they lack the funds to implement green initiatives or to prevent industrial pollution. This loan scheme helps 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 5,000 industries in the next three-five years,” he added.

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 three-five years.