Upsized Euro 4.9 m grant from EU to revive tourism industry

• Funding to be extended to 7 identified areas to develop industry
• 54 hotels run by small and medium scale entrepreneurs to benefit from cash grant
• Euro 200,000 for a social protection project implemented with ILO
• Euro 1 m to improve community-based tourism business in Central and Uva Provinces
• EU Ambassador in SL assures to make grant available soon, commends Govt. efforts to contain COVID-19 spread
• Tourism Minister appreciates EU’s continued contribution to develop SL tourism industry 

By Charumini de Silva

Considering the proposals put forward by stakeholders, the European Union (EU) has decided to increase its grant from 3.5 million Euros (Rs.728 million) to 4.9 million Euros (Rs.1.05 billion) to revive Sri Lanka’s tourism industry hit by the COVID-19 pandemic.

In May, the EU decided to grant 3.5 million Euros to boost the tourism industry impacted by the pandemic, and called on Sri Lanka Tourism Development Authority (SLTDA) to provide relevant proposals. EU Ambassador in Sri Lanka Denis Chaibi announced the funding decision yesterday during a meeting with Tourism Minister Prasanna Ranatunga to discuss steps taken to revive the tourism industry.

Ambassador Chaibi assured the Tourism Minister that the 4.9 million Euro grant will be made available to Sri Lanka soon.

“The EU has decided to increase the grant amount from 3.5 million Euros to 4.9 million Euros after going through the proposals submitted by Sri Lanka Tourism and stakeholders. The EU has identified key sectors that needs immediate financial assistance to rebound post pandemic,” Minister Ranatunga told the Daily FT after the meeting with the Ambassador.

Minister Ranatunga pointed out that President Gotabaya Rajapaksa’s policy framework has recognised tourism as a thrust sector for economic development in Sri Lanka.

The EU Ambassador has said that the grant is expected to be extended to seven key areas for the development of the tourism sector. These include: development of a tourism roadmap; wellness tourism; improving small and medium scale entrepreneurs; expanding hygiene and training of those engaged in the industry; social protection programs; and improving community-based tourism.

Accordingly, a cash grant will be provided to 54 hotels run by small and medium scale entrepreneurs in the tourism sector. In addition, it has also been decided to provide 200,000 Euros for a social protection project implemented with the International Labour Organization (ILO).

Arrangements have also been made to allocate one million Euros to improve community-based tourism businesses located in the Central and Uva Provinces. 

Ranatunga assured the EU Ambassador that the Tourism Ministry will write to the Finance Ministry’s External Resources Department to endorse the grant by the EU.

The EU Ambassador has said that Sri Lanka was one of the best examples of a country which contained the spread of COVID-19, and commended Government efforts led by President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa.

He also welcomed the strong and stable Government, noting that the EU was keen to support the development of Sri Lanka’s tourism and investment sectors.

Minister Ranatunga appreciated the EU and its continued contribution to the development of Sri Lanka’s tourism sector. Ranatunga added every step will be taken to meet the desired target despite the challenges posed by COVID-19.

According to SLTDA data, tourist arrivals to Sri Lanka stood at 71,370 in March, of which 60% of these came from European countries, with the closure of the Bandaranaike International Airport (BIA) on 19 March.

Europe is a key source market for Sri Lanka, and the tourist traffic from Europe totalled 42,084 in March.

Aviation and Export Zones Development State Minister D. V. Chanaka, EU Deputy Director General of Trade and Communications Thurston Bagfred, Tourism Ministry Secretary S. Hettiarachchi, External Affairs Ministry Secretary Madhava Devasurendra were also present at the discussion.