Sri Lanka’s renewable energy heavyweight WindForce PLC has hit the brakes on its ambitious Rs. 4 billion Green Bond issue, citing what it described as “prevailing adverse market conditions” — a move that signals just how sharply the country’s borrowing landscape has shifted in recent months.
In a filing to the Colombo Stock Exchange, the company confirmed it had formally withdrawn its initial listing application for the proposed listed, rated, senior, unsecured, redeemable Green Bond — an issue it had first unveiled back on 2 April, 2026, with considerable fanfare.
At the time of the April announcement, WindForce had proposed issuing 40 million bonds priced at Rs. 100 each, pending regulatory clearance. Details on tenure and interest rates were promised “later” — a promise that, as it turns out, would never be kept. Notably, WindForce shares dipped Rs. 0.20 to close at Rs. 44.80 on the very day the bond plan was first announced, an early hint, perhaps, of market unease.
While the company offered no detailed breakdown of what exactly went wrong, the numbers tell their own story. Sri Lanka’s interest rate environment has shifted dramatically since April — and when benchmark rates climb, corporate borrowers are forced to sweeten the deal with higher coupons just to lure investors away from the safety of government securities. That pushes up the cost of borrowing for everyone, WindForce included.
Adding fuel to the fire, the Central Bank of Sri Lanka (CBSL) hiked its Overnight Policy Rate by 100 basis points to 8.75% back in May — a defensive move against surging global oil prices driven by escalating Middle East tensions, alongside sharp increases in domestic energy costs and stronger consumer demand. Inflation, meanwhile, has been creeping upward too, hitting 8% year-on-year in August, with further increases expected in the near term, according to a Bloomberg report cited by primary dealer Wealth Trust Securities.
The bond market has felt the squeeze as well. At last week’s Treasury Bill auction, weighted average yields climbed across the board for a second straight week — the 364-day yield alone rose 5 basis points to 9.93%, Wealth Trust Securities noted. Over in the secondary Bond market on Monday, yields told a similar story: the 2030 maturity traded as high as 11.28%, while the 2034 and 2035 maturities touched 12% and 12.15% respectively, as renewed anxiety over the Middle East pushed crude oil prices — and global bond yields — higher still.
With today’s monetary policy decision looming, market participants are treading carefully. Bloomberg’s current expectation is that the CBSL will hold its policy rate steady at 8.75% — but after a week like this, few are taking anything for granted.