The Asian Development Bank’s (ADB) approval of US$300 million in financing for Sri Lanka’s water supply and sanitation sector has raised fresh questions about the country’s ability to translate substantial foreign-funded investments into efficient public services, financially sustainable institutions and long-term water security.
Although the two projects promise improved access to safe drinking water for more than 1.3 million people and better sanitation for nearly 250,000 residents in Jaffna, the critical challenge will be ensuring that the money produces measurable improvements rather than adding to the country’s growing portfolio of externally financed infrastructure commitments.
The larger allocation of US$200 million comes under the Climate-Resilient Sustainable Water Supply and Sanitation Project. It will finance new water treatment plants, transmission and distribution networks, and storage reservoirs in Colombo and Lunugamwehera. Wastewater treatment facilities, sewerage networks and pumping stations will also be developed in Jaffna.
These investments address genuine infrastructure deficiencies, particularly in areas where inadequate water distribution, sanitation facilities and climate-related risks threaten public health and economic activity.
However, the proposed expansion also exposes a longstanding weakness in Sri Lanka’s water sector: the gap between infrastructure investment and the operational efficiency of the institutions responsible for delivering services.
One of the project’s stated objectives is reducing water losses. This is particularly significant given the National Water Supply and Drainage Board’s (NWSDB) persistent difficulties in controlling non-revenue water, which represents treated water supplied through the network but generates no corresponding income because of leakages, illegal connections, metering deficiencies and other operational shortcomings.
Unless these structural weaknesses are addressed, additional treatment plants and distribution networks could increase operating costs without delivering the expected financial returns.
The remaining US$100 million has been allocated to the second subprogram of the Water Supply and Sanitation Reform Program, focusing on governance, service delivery and attracting private sector financing.
The programme will support reforms covering water resources management, sanitation, climate resilience, tariffs and the financial sustainability of the NWSDB.
The emphasis on tariff reforms is particularly sensitive. While financially sustainable water services require adequate revenue, higher tariffs could place additional pressure on households, small businesses and low-income communities already struggling with rising living costs.
The Government therefore faces the difficult task of balancing cost recovery with affordable access to an essential public service.
Equally important is the proposed encouragement of private sector participation. Although private investment could introduce additional capital, technology and management expertise, transparent procurement, effective regulation and clear public accountability will be essential to protect consumers and national interests.
ADB Country Director for Sri Lanka Shannon Cowlin has emphasised that safe, reliable and sustainable water and sanitation services are essential for public health and economic growth.
Nevertheless, the success of this US$300 million commitment cannot be measured simply by the amount approved or the number of infrastructure projects announced.
The public deserves clear timelines, transparent procurement disclosures, independent monitoring and measurable performance targets covering water losses, service reliability, sanitation coverage and institutional financial performance.
Sri Lanka has repeatedly experienced infrastructure projects whose anticipated benefits have been undermined by implementation delays, cost overruns and weak institutional management.
The latest ADB financing therefore presents an opportunity to correct these weaknesses.
Ultimately, the real test will be whether US$300 million delivers lasting improvements to ordinary people’s lives, strengthens the NWSDB and creates a water sector capable of sustaining itself without repeatedly depending on foreign borrowing.
Foreign financing can build infrastructure, but only accountability, competent management and effective reforms can secure Sri Lanka’s water future.