Green Bonds Meet Earning Returns While Saving the Earth

 A Green Bond is a unique kind of bond where the money raised is used only for environmentally friendly projects. For investors, it behaves just like a typical bond for investors , they lend money and receive fixed interest. The difference is that their money also helps the planet.This is what makes Green Bonds attractive since people can earn a profit and contribute to sustainability

The Commercial Bank of Ceylon recently issued a Green Bond issue worth Rs. 15 billion. The response was very strong  among investors who are submitted 160 applications totaling Rs. 21.3 billion. The issue started with an initial offer of Rs. 10 billion through 100 million Green Bonds, each valued at Rs. 100. Since demand was high, the bank used its option to issue more bonds, increasing the amount to Rs. 15 billion. 

The funds raised will help improve the Capital Adequacy Ratio of Commercial Bank by increasing its Tier 2 Capital base, in line with Basel III requirements. This makes the bank stronger and more stable. 

The money from this Green Bond issue will be used only for financing or refinancing green projects. This is clearly stated in the bank’s Sustainable Bond Framework, which follows global standards such as:

global standards

personal Analysis

This Green Bond issue is a strong example of how finance and sustainability can work together.

From a financial perspective, it shows the power of the debt market. Instead of relying on short-term deposits, Commercial Bank raised long-term funds from investors. The strong response also shows confidence in the bank and in the bond market.

From an academic perspective, this connects directly to interest rates. Investors carefully looked at the fixed rates (10.55%–11.30%) and chose the options that best matched their needs. The oversubscription proves that these rates were attractive.

From an institutional perspective, Commercial Bank is playing its role as a responsible financial institution. By following Basel III standards and Green Bond Principles, it is ensuring both financial stability and environmental responsibility.

In short, this event is important not just for the bank, but also for the future of green finance in Sri Lanka. It shows how the banking sector can help build a sustainable economy while also giving investors fair return

by  Abdullah. MFM (236002L)

Reference article - https://www.ft.lk/financial-services/ComBank-s-Rs-15-b-Green-Bond-issue-draws-160-applications-worth-Rs-21-3-b/42-780098