The Sri Lankan Government is intensifying efforts to translate its climate commitments into tangible results by actively engaging the private sector to mobilise large-scale financing for its ambitious green transition. The move comes as the country faces soaring costs to meet its updated Nationally Determined Contributions (NDCs) under the Paris Agreement, with mitigation needs alone estimated at over US$10 billion between 2021 and 2030—and rising as new emission targets are adopted.
Speaking at the launch of the National Climate Finance Strategy (NCFS) last Friday, UNDP Sri Lanka Resident Representative Azusa Kubota urged policymakers to act swiftly, warning that the cost of inaction would be “unimaginable” for an economy deeply dependent on natural resources such as agriculture, fisheries, and tourism. She noted that climate change touches every facet of development from public health and infrastructure to livelihoods—making climate finance central to achieving the Sustainable Development Goals (SDGs).
Kubota praised the NCFS as a crucial roadmap for aligning domestic and international resources with Sri Lanka’s long-term sustainability goals. The framework, she said, provides a clear signal to global investors that the country has established credible governance, financial systems, and accountability mechanisms to support green investments.
The government’s new approach aims to blend public and private finance, leveraging private sector innovation and efficiency to accelerate climate action. Kubota emphasized that no single institution or actor can drive this transformation alone, underscoring the importance of partnerships between state institutions, corporations, and multilateral donors.
She urged the government to introduce policy and regulatory reforms to attract private investmen particularly through de-risking tools, tax incentives, and transparent project pipelines. Globally, private climate finance surpassed US$1 trillion in 2023, outpacing public sector funding for the first time, a shift Sri Lanka hopes to emulate by fostering confidence among investors through predictable frameworks and performance-based incentives.
The Finance Ministry, supported by the UK Government, UNDP, and Asian Development Bank (ADB), is spearheading the implementation of the NCFS. Proposed mechanisms such as a Green Development Fund are expected to channel investments into renewable energy, sustainable agriculture, and biodiversity protection, while ensuring alignment with global Environmental, Social, and Governance (ESG) principles.
Kubota described the strategy as a “motherboard” to coordinate inter-agency efforts, reduce duplication, and attract capital. She stressed that Sri Lanka’s success depends on the collective will to align and act, ensuring that “every rupee and dollar invested delivers maximum impact for people and the planet.”
If effectively implemented, the NCFS could position Sri Lanka as a regional leader in sustainable finance, catalyzing a shift where private enterprise becomes a key driver of the nation’s low-carbon, climate-resilient future.
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