The Asian Development Bank (ADB) has sanctioned a results-based loan of $100 million aimed at enhancing Sri Lanka’s technical and vocational education and training (TVET) system. This initiative seeks to equip a greater number of young individuals with skills that align with industry demands and bolster the nation’s competitiveness and inclusive economic growth.
The Skills Development System Transformation Program is designed to assist the Sri Lankan government in elevating the quality and relevance of skills training, fostering stronger connections between educational institutions and industry sectors, and broadening job opportunities for the youth. The initiative aims to enhance employment prospects for women in nontraditional fields such as automotive technology, engineering, information and communications technology, construction, and renewable energy.
Shannon Cowlin, ADB Country Director for Sri Lanka, emphasized the importance of a skilled workforce for the country’s long-term economic advancement and competitiveness. She stated, “This program will facilitate more effective transitions from education to employment by aligning training with industry requirements, broadening opportunities for young people and women, and ensuring that graduates possess the skills essential for a modern and evolving economy.”
Despite signs of economic recovery in Sri Lanka, the country continues to grapple with skill shortages in key sectors, high levels of youth unemployment, and low participation rates of women in the labor force. Numerous employers have expressed challenges in locating workers who possess the necessary skills suited for a changing economic landscape.
In accordance with the Government of Sri Lanka’s Technical and Vocational Education and Training Sector Strategic Framework for 2026–2035, this comprehensive program will be rolled out between 2027 and 2031, with the expectation of directly benefiting over 100,000 young individuals through enhanced access to quality training focused on employment.
The program will also provide improved career guidance for high school students, bolster capacity-building initiatives for educators, and enhance collaboration between schools and training institutions. To modernize the delivery of TVET, it will set up a center of excellence in automotive technology, implement a hub-and-spoke training model throughout all nine provinces, upgrade learning environments, and introduce new courses aligned with industry needs in priority sectors. Additionally, it will strengthen partnerships between training providers and employers through workplace learning opportunities, industry involvement in skills assessments and certifications, and improved mechanisms for private sector engagement.
To enhance governance and quality assurance, the program will establish a national accreditation framework, introduce performance-based financing strategies, and implement a unified digital training management information system that aligns skill development with labor market requirements.
The financing package includes a $50 million regular loan, a $50 million concessional loan, and a $500,000 technical assistance grant from ADB.
ADB is a prominent multilateral development bank dedicated to fostering sustainable, inclusive, and resilient growth throughout Asia and the Pacific. By collaborating with its members and partners to tackle complex challenges, ADB employs innovative financial solutions and strategic partnerships to improve lives, develop quality infrastructure, and protect the environment. Established in 1966, ADB is comprised of 69 members, 50 of which are from the Asia-Pacific region.
