Gender equality and women’s empowerment are key considerations in designing projects at ADB. ” In Sri Lanka, most projects financed by ADB include a gender action plan that outlines specific targets and activities to ensure benefits for both women and men”, said ADB Sri Lanka Country Director Takafumi Kadono in an interview with the Sunday Observer.
ADB recently co-organised the Digital Public Infrastructure Summit with the Ministry of Digital Economy and UNDP to accelerate transformation. “We believe that digital transformation is needed for economic transformation and strengthening governance.” the Country Director said.
ADB Sri Lanka Country Director
Takafumi Kadono
Among other key projects, ADB is also supporting the Ministry of Environment and its Climate Change Secretariat (CCS) as well as the Ministry of Finance to identify various investment plans to address climate change and promote environmental sustainability, he added.
Excerpts
Q: With Anura Kumara Dissanayake as President, Sri Lanka has entered a new political era. What were the key areas of focus during your recent discussion with the President?
A: The delegation from the Asian Development Bank (ADB) explained to the President ADB’s operations in various sectors and the President was appreciative of the support ADB has provided to Sri Lanka. He explained the approach of the government in several areas, including the power sector, state-owned enterprise (SOE) reforms, rural and agriculture development, and the financial sector. He emphasised the government’s commitment to look for approaches to improve service delivery and engaging with the private sector appropriately. ADB conveyed ADB’s willingness to work with the government in bringing in private sector investments through public– private partnerships (PPP), which ADB has been supporting in the past. The President expressed the government’s interest in strengthening tourism and developing the north as a tourist destination. We also discussed digitalisation, governance, and skills development.
Q: What are ADB’s major development priorities for Sri Lanka in 2025? Could you elaborate on the main sectors where ADB provides the most support in Sri Lanka?
A: In 2025, ADB will support Sri Lanka through a blend of policy support and investments in key sectors, using several lending modalities. ADB will provide policy-based lending (PBL) to address structural weaknesses by strengthening public expenditure management, enhancing revenue collection, and improving the governance and efficiency of SOEs, PPPs, and the Employee Provident Fund (EPF). In the power sector, ADB will continue to support sector reforms and move the sector toward financial sustainability. The 2025 pipeline has sector development programs in tourism and agriculture value chain development, which will support policy reforms as well as provide investments into the sectors. A results-based lending program in the health sector will strengthen integrated health care and governance for universal health coverage. There is one investment project identified for this year in the energy sector, which will empower small enterprises through renewable energy virtual net metering.
Q: How does ADB contribute to Sri Lanka’s recovery post-pandemic and its economic restructuring?
A: The government requires Budget support due to its tight fiscal space. This is provided by the Asian Development Bank alongside the International Monetary Fund and the World Bank. Budget support is provided based on the achievement of policy reforms. ADB takes a sector-specific approach, for example, in the power sector and the financial sector. Some support for reforms are combined with investment financing such as in those proposed in the tourism and agriculture value chain projects. Strengthening governance is a prerequisite both for the government and ADB.
Q: What are the specific ADB programs in Sri Lanka that promote gender equality and empowerment?
A: Gender equality and women’s empowerment are key considerations in designing projects at ADB. In Sri Lanka, most projects financed by ADB include a gender action plan that outlines specific targets and activities to ensure benefits for both women and men. In the transport, water, and energy sectors, ADB helps develop infrastructure that addresses the needs of women and other socially vulnerable groups while promoting female employment and income-earning opportunities, especially in traditionally male-dominated fields. In the finance sector, ADB aims to provide women-owned small and medium-sized enterprises (SMEs) with access to formal financing. In education, ADB promotes Science, Technology, Engineering and Mathematics (STEM) education for female students and enhances vocational education to benefit both female and male students.
Q: How does ADB integrate sustainable development goals into the projects funded by the Bank?
A: All ADB operations are anchored on the Sustainable Development Goals (SDG). The overarching strategy of ADB, called Strategy 2030, is formulated around the SDGs and other global initiatives. However, we take a differentiated approach to ensure that the country’s needs and the country context is taken into consideration.
Q: Given Asia’s and Sri Lanka’s vulnerability to climate change, what initiatives are being developed to address environmental sustainability?
A: Sri Lanka gained a score of 45.6 for the 2022 ND-GAIN (Notre Dame Global Adaptation Initiative) and was ranked 110 out of 187 countries. The ND-GAIN index is based on the country’s vulnerability and readiness to climate change. While energy sector projects funded through ADB resources support the climate change mitigation aspect, all projects (including energy) include adaptation measures from the project design stage. The Mahaweli Water Security Investment Program (a flagship project) which is being implemented in North Western Province (NWP) and the North Central Province (NCP) of Sri Lanka as part of ADB’s efforts to address climate change is one such example.
This trans-basin water diversion project aims to supply water from the Mahaweli River for irrigation and drinking purposes in these provinces which are expected to become drier due to climate change. On the policy front, ADB is supporting the Ministry of Environment and its Climate Change Secretariat (CCS) as well as the Ministry of Finance to identify various investment plans to address climate change and promote environmental sustainability. ADB had already assisted the CCS in developing climate risk assessments for the mountain and coastal regions of the country, and a sector risk profile. ADB plans to support the CCS in developing the next iteration of the Nationally Determined Contributions (NDC 3.0).
Q: What are the ongoing development projects for the poor? What measures are in place to ensure that the projects financed by ADB benefit the most vulnerable communities/vulnerable districts in Sri Lanka? ii) Are there any projects focused on developing provinces such as the North and East?
A: All ADB projects are intended to directly or indirectly benefit the poor and the vulnerable. There are some projects that are notable. The Food Security and Livelihood Recovery Emergency Assistance Project primarily aimed to provide immediate cash transfers to vulnerable families during the economic crisis, benefiting ‘Aswesuma’ recipients and farmers across the country. Additionally, it supports a pilot empowerment program targeting the two lowest poverty brackets.
The Small and Medium-Sized Enterprises Line of Credit Project focuses on providing SMEs with access to finance, helping them grow their businesses and access markets. Priority is placed on women-entrepreneurs. In the health sector, projects targeted four of the country’s nine geographically and economically disadvantaged provinces, namely, Uva, Sabaragamuwa, Central, and North Central. During the Covid-19 pandemic and the subsequent economic crisis, health sector projects allocated $66 million to provide emergency medical supplies nationwide. The Jaffna and Killinochchi Water Supply Project represents a key investment for the Northern region, while all other projects are implemented nationwide.
The results-based lending programs in the education sector, along with the Food Security and Livelihood Recovery Emergency Assistance Project and the Small and Medium-Sized Enterprises Line of Credit Project and its additional financing projects are being implemented nationwide, ensuring that both the Northern and Eastern provinces benefit equally from these initiatives.
Q: How does ADB collaborate with other multilateral / bilateral development partners to maximise the impact of projects in Sri Lanka?
A: ADB engages with other development partners through various forums and bilateral dialogue to ensure coordination of support and to avoid overlap. On supporting the reforms, ADB’s assistance is aligned to the IMF program. At the sector level, ADB is guided by the government’s directions and direct coordination among development partners. There are many options available for collaborating with other development partners including co-financing and parallel financing of projects. Recently ADB signed an Administrative Arrangement agreement with UNDP to provide funding through UNDP to support anti-corruption activities. ADB and the World Bank have recently adopted a framework which enables us to significantly strengthen our collaboration and harmonise our assistance.
Q: In the next five to ten years, where do you see the biggest opportunities for development in Sri Lanka, and how will your bank capitalise on them?
A: We recognise the immense potential in strengthening public financial management and governance. Improving the efficiency and transparency of public sector operations will create a solid foundation for sustainable development over the next five years and beyond. We prioritise private sector development as a key focus. We plan to support initiatives that foster a more conducive environment for private investment, which will in turn drive economic growth and create jobs.
Promoting green growth is another major opportunity, notably renewable energy and climate resilient infrastructure will not only help mitigate the impacts of climate change but also promote long-term economic stability.
Agriculture value chains, sustainable tourism, integrated healthcare systems, and skills development are crucial for economic diversification and resilience in the medium to long term. Finally, we believe that digital transformation is needed for economic transformation and strengthening governance. ADB recently co-organised the Digital Public Infrastructure Summit with the Ministry of Digital Economy and UNDP to accelerate transformation.
Q: How does the Asian Development Bank ensure transparency and accountability in the projects it funds in Sri Lanka?
A: As per 2024 Aid Transparency Index, ADB was rated as very good in terms of quality, quantity and timeliness of aid data.
All project related documents, including the project scope outlined in the Report and Recommendation of the President, loan agreements, procurement plans, projects’ audited financial statements, and other project related information, are available for public access on the ADB website. Each year, the accounts of ADB-financed projects are audited to ensure that project funds are used for their intended purposes.
Additionally, ADB teams conduct regular reviews of project implementation to ensure that project outputs are achieved on time, that financial management of the project is acceptable, and safeguard action plans are being implemented. Furthermore, the implementation performance of each project is jointly reviewed by ADB and the Ministry of Finance twice a year during the Tripartite Portfolio Review Meetings.
Q: What are Asia’s key development challenges at the moment? How should Asia’s larger economies be integrated into the development of poorer economies?
A: Asia faces several key development challenges in 2025. Economic Slowdown and Inflation: Many Asian economies are grappling with slower growth and persistent inflation.
This is largely due to global shocks, including trade policies from the United States and economic struggles in China.
Digital Transformation: Digital transformation is proceeding at an unprecedented rate.
New advances in technology, particularly in artificial intelligence (AI), are profoundly changing the way people live and work.
These technologies have great potential to advance the development agenda, improve public service delivery, reduce transaction costs, and drive growth and innovation.
Climate Change: Climate change remains one of the most pressing challenges. Its impacts are far-reaching, affecting agriculture, health, and overall economic stability. Asia’s larger economies can play a crucial role in the development of poorer economies by focusing on several key strategies.
For example: Promoting Globalisation: Maintaining and enhancing global connectivity through trade and investment flows can drive economic integration in Asia. This will contribute to a more interconnected and prosperous region for both larger and poorer economies. Regional cooperation and integration is embedded in the core of ADB’s identity. ADB has a strong history of supporting regional cooperation and integration, including physical infrastructure and connectivity, trade and logistics facilitation and enhancing value chains.
Tackling Climate Change: Collaborative efforts in green development and sustainable practices can benefit the entire region. By working together, Asian nations can effectively tackle climate change and create a sustainable future for all.
