HNB Sustainable Bonds have entered Sri Lanka’s capital market with a notable debut as Hatton National Bank PLC successfully raised LKR 10 billion through its first sustainable bond issuance, reflecting rising investor confidence in responsible and climate-aligned financing.
HNB Sustainable Bonds attract strong investor confidence
HNB Sustainable Bonds have set a significant benchmark in Sri Lanka’s evolving sustainable finance landscape, following Hatton National Bank PLC’s successful first issuance of these instruments, which was fully oversubscribed on the day of launch. The landmark transaction underscores both the growing appetite for environmental, social, and governance-linked investments and the banking sector’s expanding role in financing inclusive, climate-resilient development.
The LKR 10 billion sustainable bond issuance was formally commemorated at a market opening ceremony held on the trading floor of the Colombo Stock Exchange last week. The event marked an important moment for Sri Lanka’s capital markets, as sustainable bonds were introduced locally for the first time this year under the broader GSS+ framework, which includes green, social, sustainable, and sustainability-linked debt instruments.
Issued on 9 December, the bonds consisted of 100 million listed, rated, unsecured senior instruments offered in five-year and seven-year tenors, each with a par value of LKR 100. The issuance received an “AA-(lka)” rating from Fitch Ratings Lanka Limited, reflecting the bank’s strong credit profile and prudent risk management. Investor demand exceeded the initial offer on the same day, enabling HNB to raise the full targeted amount of LKR 10 billion.
Market participants view the oversubscription as a clear signal of increasing confidence in sustainability-linked financial products, particularly those issued by established institutions with a proven track record. As climate risks, social equity, and long-term resilience become more central to investment decisions, instruments such as HNB Sustainable Bonds are gaining relevance among both institutional and retail investors seeking responsible returns.
The proceeds from the issuance will be allocated to a wide range of eligible projects designed to generate measurable environmental and social outcomes. These include the development and installation of renewable energy systems such as solar, wind, biomass, and hydropower, as well as initiatives to improve energy efficiency through retrofitting and modernisation. Funding will also support the construction of recognised green buildings and investments in water treatment, conservation, and efficient agricultural water technologies.
Beyond environmental objectives, the financing framework places strong emphasis on social inclusion. Capital raised through the bonds will be channelled towards housing, healthcare, and education projects aimed at low- and middle-income families. Support for women entrepreneurship and community-based development initiatives further aligns the issuance with national priorities for inclusive growth and equitable access to economic opportunity.
Commenting on the issuance, HNB Managing Director and Chief Executive Officer Damith Pallewatte described the transaction as a defining moment in the bank’s sustainability journey. He noted that directing capital towards projects with tangible environmental and social benefits enables the creation of long-term value for stakeholders while contributing to a greener and more inclusive economic future for Sri Lanka. His remarks highlighted the growing expectation that financial institutions play an active role in addressing climate and development challenges through responsible capital allocation.
The Colombo Stock Exchange also welcomed the issuance as a positive signal for the broader market. CSE Chief Executive Officer Rajeeva Bandaranaike observed that corporate participation in GSS+ instruments has increased steadily, positioning the capital market as an effective financing platform for sustainable and socially equitable projects. He described HNB’s sustainable bond as a timely addition that strengthens the credibility and momentum of Sri Lanka’s emerging sustainable finance ecosystem.
HNB’s leadership in this space builds on its longstanding reputation for strong governance and responsible banking. In 2025, the bank was named Best Bank in Sri Lanka by The Banker magazine and ranked among the Top 1,000 World Banks globally. It was also recognised as the Strongest Bank in Sri Lanka by TAB Global and received the Best Corporate Citizen Sustainability Award 2025, reflecting its consistent focus on ethical conduct, transparency, and long-term value creation.
Analysts note that the successful placement of HNB Sustainable Bonds may encourage other financial institutions and corporates to explore similar instruments, broadening the depth and diversity of Sri Lanka’s sustainable debt market. As regulatory frameworks and investor awareness continue to mature, such issuances are expected to play a growing role in mobilising private capital for national development priorities.
In this context, HNB’s debut sustainable bond issuance is viewed not only as a financing achievement but also as a signal of changing market expectations. By aligning financial performance with environmental stewardship and social responsibility, the bank has demonstrated how mainstream financial institutions can integrate sustainability into core funding strategies while maintaining investor confidence.