By: Staff Writer

September 11, Colombo (LNW): Sri Lanka has officially launched its National Climate Finance Strategy (2025–2030), aiming to mobilise private capital into climate-resilient and low-carbon sectors, Cabinet Spokesperson and Health Minister Dr. Nalinda Jayatissa confirmed yesterday. The move comes as the country faces increasing climate-related risks, with the Global Climate Risk Index identifying Sri Lanka as highly vulnerable to catastrophic weather events, causing annual economic losses exceeding 2% of GDP.

Dr. Jayatissa highlighted that mitigating and adapting to these risks requires roughly $500 million annually for climate-resilient infrastructure—equivalent to 0.5% of GDP—a figure beyond the capacity of the national budget. “Significant private sector investments are essential in renewable energy, agriculture, fisheries, and resilient infrastructure. The strategy establishes a structured framework to attract such green financing beyond traditional budgetary allocations,” he said.

The strategy, developed by the Department of External Resources and the Department of National Planning with UNDP support, involved contributions from 35 government institutions, including the Ministries of Environment, Wildlife Conservation, and Forests. The Cabinet approved the President’s proposal, in his capacity as Finance Minister, to officially declare and implement the strategy.

Experts suggest that Sri Lanka’s ability to achieve the ambitious targets of the strategy will depend on several factors. The framework is designed to attract private investment through incentives, guarantees, and partnerships, but consistent policy execution and regulatory stability are critical to building investor confidence. Ensuring transparency in fund allocation, project monitoring, and adherence to environmental and social safeguards will also be essential to maintain credibility in global climate finance markets.

The strategy sets out a multi-sectoral approach, targeting renewable energy expansion, climate-resilient agriculture and fisheries, and enhanced infrastructure capable of withstanding extreme weather events. By diversifying financing sources beyond public expenditure, the government aims to mobilise capital for long-term sustainable development while mitigating climate-induced economic shocks.

However, challenges remain. Sri Lanka’s current fiscal constraints and competing development priorities may limit the scale and pace of implementation. Success will require close coordination between government agencies, private sector actors, and international development partners, along with robust monitoring mechanisms to track progress against targets.

“Mobilising private capital through a structured strategy is a necessary step, but turning plans into tangible outcomes will test the government’s policy coherence and operational capacity,” said an independent climate finance analyst.

The National Climate Finance Strategy represents a critical opportunity for Sri Lanka to strengthen climate resilience while fostering green economic growth. Its success will largely depend on effective execution, investor confidence, and sustained commitment across both public and private sectors to achieve the country’s climate and development goals.

By: Staff Writer

September 11, Colombo (LNW): Sri Lanka has made significant progress in stabilising its economy, undertaking one of the largest and fastest fiscal adjustments in its history, according to a new World Bank report. The diagnostic review, titled Sri Lanka Public Finance Review: Towards a Balanced Fiscal Adjustment, highlights that the country’s fiscal consolidation over the past three years equivalent to nearly 8% of GDP has been sharper and quicker than most international counterparts.

The World Bank noted that Sri Lanka’s adjustment compares favourably with more than 330 similar fiscal consolidation efforts in 123 countries since 1980. The review underscores that the country is now in a position to focus on improving the efficiency and fairness of public finances to benefit all citizens.

While fiscal measures have successfully restored macroeconomic stability, the Bank cautioned that these efforts have also come at a cost. Higher indirect taxes and reduced real public-sector wages have placed pressure on households, while lower public investment has slowed growth. The report calls for a calibrated next phase of fiscal policy that raises revenue without undermining growth or equity and ensures government spending delivers maximum impact.

The review identifies that Sri Lanka could raise revenue by up to 2% of GDP by 2029 through smarter, fairer taxation. Recommendations include shifting toward direct taxes, such as implementing a minimum corporate income tax, and digitising tax administration to simplify compliance and increase transparency.

On the expenditure side, the World Bank emphasises “spending smarter, not more.” The report advises improving the management of public sector wages, safeguarding essential frontline services, simplifying pay structures, and modernising payroll systems. Capital investments should be reprioritised to address infrastructure gaps, ensure ongoing projects are completed faster, and strengthen project management and maintenance practices.

Social protection systems also require reform. The report encourages more targeted assistance, expanding the social registry, and moving away from universal subsidies to direct support for the most vulnerable. Such measures aim to ensure that public resources are spent effectively, delivering tangible benefits to those who need them most.

“Now that Sri Lanka has largely stabilised its economy, the challenge is to get better results from every rupee collected and spent,” said David Sislen, World Bank Division Director for Maldives, Nepal, and Sri Lanka. “Modernising tax administration, focusing on direct taxes, and making public spending both efficient and fair are critical to sustaining stability and promoting inclusive growth.”

The World Bank’s findings signal that while Sri Lanka has successfully navigated an unprecedented fiscal consolidation, the next stage demands smarter policy choices and better governance to ensure the benefits of stability translate into sustainable growth and improved living standards.

By: Staff Writer

September 11, Colombo (LNW): An Asian Development Bank (ADB) delegation recently visited MAS Holdings’ Fabric Park in Thulhiriya, Sri Lanka, marking a significant step toward fostering private sector growth through strategic partnerships and targeted investment.

The visit provided the ADB team with an in-depth look at MAS’ operations, highlighting the company’s emphasis on manufacturing excellence, innovation, and sustainable business practices.

According to MAS, the engagement allowed ADB officials to directly experience the company’s integrated production processes, research and development initiatives, and commitment to environmental sustainability. These insights, the company noted, are crucial in shaping development strategies that encourage private sector-led growth.

“Collaborating with leading private sector companies like MAS is key to promoting sustainable growth and resilience,” said Takafumi Kadono, ADB’s Country Director for Sri Lanka. “We are impressed by MAS’ dedication to innovation and environmental responsibility, which align closely with ADB’s regional development priorities.”

The visit also underscores the growing role of institutions such as the ADB in understanding and supporting the evolving dynamics of Sri Lanka’s apparel industry. Rajitha Jayasuriya, Director of Corporate Affairs at MAS, emphasized that engagements like this “build bridges between industry and development partners, creating new opportunities for inclusive growth and long-term impact.”

By opening channels for dialogue with major development institutions, MAS is demonstrating the potential for knowledge sharing, specialised investment, and collaborative initiatives that can further strengthen Sri Lanka’s textile and apparel sector.

Such interactions provide private sector firms with insights into global best practices, sustainability frameworks, and technological advancements that are essential for maintaining competitiveness in the international market.

Sri Lanka’s apparel industry remains a cornerstone of the national economy, contributing significantly to employment, export revenue, and industrial innovation. Partnerships with development institutions like the ADB can accelerate the adoption of sustainable technologies, enhance workforce skills, and facilitate investment in cutting-edge manufacturing infrastructure, thereby positioning the sector for long-term growth.

The ADB visit is also a signal to other investors and development partners that Sri Lanka’s private sector is open to collaboration and innovation. By showcasing the operations of a leading firm such as MAS, the engagement highlights both the potential and readiness of the industry to embrace strategic investments that drive economic resilience and sustainable development.

As Sri Lanka continues to strengthen its apparel sector, initiatives that foster public-private dialogue and international collaboration are likely to become increasingly important. The ADB delegation’s visit to MAS Fabric Park exemplifies how targeted engagement with the private sector can unlock pathways for innovation, competitiveness, and inclusive economic growth, reinforcing the country’s position as a key player in the global textile market.