5,000 local industries hit Rs 5B green fund jackpot

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By 2017-12-07

More than 5,000 Sri Lankan industries have secured the country's first large-scale green funding initiative aimed solely at the manufacturing sector, including SME industries, a press release announced. Through this initiative, Rs 5 billion in funds is to be channelled through 11 leading financial institutions, which include nine commercial banks.

"Many industries, including small and micro industries, did not receive sufficient funds and did not have pollution-control measures. These SMILE Loans help the industries and industrial entrepreneurs to commence green initiatives and take environmentally-friendly steps," said Minister of Industry and Commerce Rishad Bathiudeen on 6 December. He was addressing the Environmentally-Friendly Solution Revolving Fund Loan Scheme organized by his Ministry's Project Management Unit, held at Colombo 03 on 6 December, the release added.

Bathiudeen was joined by State Minister Champika Premadasa and Secretary of Ministry of Industry and Commerce, N Ranjan Ashoka.
"Since the early 1970s, international donors have supported and initiated environmental programmes 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," Bathiudeen stated. "Our industries are concerned about reducing environmental pollution, but they lack funds to implement green initiatives or prevent industrial pollution. This loan scheme helps the industries and industrial entrepreneurs to commence their green initiatives and perform such environment-friendly steps. 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 3-5 years."

The scheme will provide more than 5,000 Sri Lankan industries with low-cost loans at 6.5% per annum, totalling Rs 5.2 billion for the next 3-5 years for upgrades related to 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, the release added.

"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, strengthening of public institutions for lasting peace; thirdly, socio-economic resilience; and finally, resilience to climate change and disaster," said Bathiudeen.

"Sri Lanka's reform efforts are being developed under the 2018-2022 UNSDF that the 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 the E-Friends-2 loan scheme launched today can also help us in this. The earlier general loan scheme was implemented first in 2004 and completed in 2010. As per the agreement between the Government of Sri Lanka and Japan Bank for International Cooperation, re-lending of re-paid loans was allowed. Accordingly, PMU has started implementing this scheme to provide loans to entrepreneurs and industries throughout Sri Lanka at low interest rates."
In this first-ever green financial industry initiative in Sri Lanka, each qualifying industry is entitled to a maximum loan of Rs 30 million at an annual interest of 6.5% in the next 3-5 years, the release concluded.

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