Sri Lanka’s Sanasa Development Bank has received $28.5 million in equity and capital funding from existing investors SBI-FMO Emerging Asia Financial Sector Fund, Dutch development bank FMO and International Finance Corporation (IFC).
SBI-FMO Emerging Asia Financial Sector Fund, an investment vehicle of Japanese conglomerate SBI Group and FMO, and IFC together invested $22 million in equity.
FMO and the SBI-FMO Fund will also extend long-term tier-2 funding worth $6.5 million to support new business opportunities that include lending for SMEs, cooperative and retail. An SBI-FMO Fund official confirmed the news.
Following the transaction, FMO and the SBI-FMO Fund will hold 12.9 per cent in the bank while IFC’s stake will rise to 8.9 per cent.
In December last year, Sanasa had raised $48 million from FMO, SBI-FMO Fund and IFC through a private placement of ordinary shares.
The SBI FMO Fund, which invests in promising financial sector opportunities in emerging Asia (with a focus on India, Sri Lanka, Bangladesh, Indonesia, Philippines, Thailand, Cambodia and Vietnam), is managed by SBI Ven Capital. The vehicle is worth $100 million.
Meanwhile, IFC has also signed a Memorandum of Understanding (MoU) with the Central Bank of Sri Lanka (CBSL) to enhance and develop environmental and social risk management and sustainable financing practices for Sri Lanka’s financial sector.
“We see a great opportunity for Sri Lankan banks to support greener, cleaner projects aligned with climate change impacts. We also welcome the cooperation and technical expertise shared by IFC and the Sustainable Banking Network,” said Dr Indrajit Coomaraswamy, Governor, Central Bank of Sri Lanka.
Under this partnership, the Central Bank will collaborate with SBN to develop a sustainable finance roadmap to guide the local banking and finance industry; strengthen the capacity of the banking sector to implement such practices; facilitate knowledge sharing with other SBN members; and promote green investment in the island nation.