ADB Approves $100M Loan to Strengthen Sri Lanka's Water Supply and Sanitation Reforms for Climate Resilience

To address these challenges, Subprogram 1 is supporting the implementation of a National Water Resources Policy approved by the Prime Minister's Office.

The Asian Development Bank (ADB) has approved a $100 million policy-based loan to support Sri Lanka in reforming its water supply and sanitation sector, aimed at enhancing resilience to climate change and promoting long-term sustainability. The Water Supply and Sanitation Reform Program consists of two subprograms, each valued at $100 million. Subprogram 1 focuses on establishing national policies and strategies, while Subprogram 2 will implement these reform measures.

“Fragmented water resource management and the growing impacts of climate change severely limit Sri Lanka's ability to deliver safe and reliable water supply. This affects the daily lives of many Sri Lankans, especially those without access to piped water,” said Pedro Almeida, ADB’s Senior Urban Development Specialist. “This program will improve access to safe water while addressing governance challenges and enabling private sector participation.”

Sri Lanka's water resources management has long struggled with issues such as the uneven allocation of water between agriculture and domestic use, inadequate integration of climate considerations into planning, the involvement of multiple agencies, and the environmental impacts of unplanned land use and deforestation.

To address these challenges, Subprogram 1 is supporting the implementation of a National Water Resources Policy approved by the Prime Minister's Office. This policy promotes equitable water allocation and sharing, as well as national policies for access to safe drinking water, gender-sensitive service delivery, and a climate change roadmap. Additionally, the Ministry of Water Supply and Estate Infrastructure Development (MWS) is approving a climate-resilient framework for project investments, improving financial sustainability and efficiency within the National Water Supply and Drainage Board (NWSDB).

The program is also backed by an $800,000 technical assistance grant, aimed at providing capacity-building and advisory support to MWS and NWSDB for the implementation and monitoring of reforms. ADB’s Technical Assistance Special Fund will contribute $500,000, with an additional $300,000 from the Water Innovation Trust Fund, under the ADB-administered Water Financing Partnership Facility.