AFD joins Govt. to preserve and develop potential of country’s blue economy

World Oceans Day

Today, the oceans are more threatened than ever. Plastic litter, water pollution, overfishing and uncontrolled urbanisation are global as well as local challenges – Pic by Shehan Gunasekara

Oceans play a significant role in our lives. They provide most of the oxygen we breathe, are an essential part of the biosphere and a major source of food. They are also a key source of economic activity – over three billion people depend on marine and coastal biodiversity for their livelihoods. 

This blue economy covers sectors such as fisheries, shipbuilding and tourism as well as emerging industries, including ocean energy and biotechnology. Protecting the oceans is thus a social, environmental and economic challenge. 

In order to meet the challenges of preserving and developing the blue economy potential in Sri Lanka, the French Agency for Development (AFD, Agence Française de Développement) is working with the Sri Lankan Government by financing sanitation infrastructures required in selected coastal cities. In addition, AFD is looking into supporting the tourism sector as well as developing fishing harbours in the south of the country so that they meet the highest standards.

Supporting urban sanitation sector in Sri Lanka to protect environment, improve public health and boost potential of blue economy

Today, in Sri Lanka, more than three million inhabitants live less than a kilometre away from the coast, and less than 1% of the population is connected to a wastewater treatment system. In this context, developing the sanitation sector is key to public health, and vital for economic, social and environmental reasons. With the aim to achieve a service coverage rate of 7% by 2020 in Sri Lanka, the Government requested AFD’s support to develop this emerging sector.

AFD is one of the main donors in the urban sanitation sector in Sri Lanka. In 2018, it signed a Credit Facility Agreement with the Sri Lankan Government for EUR 76 million (Rs. 15 b) to support the Sanitation and Hygiene Initiative for Towns (SHIFT) Project. Co-financed by the European Union for EUR 5.7 million (Rs. 1.12 b), this project aims at enhancing Negombo’s wastewater management systems and supporting preliminary studies to implement a similar project in Kelaniya, Peliyagoda, Galle and Unawatuna (the Coastal Cities Project).

AFD also signed a loan agreement for EUR 75 million (Rs. 15 b) to support a sanitation project in Ratmalana and Moratuwa in February 2019. This project aims to improve the living conditions of Ratmalana and Moratuwa inhabitants and preserve the coastal ecosystem by extending the sewerage network and optimising the existing wastewater treatment plant in Ratmalana. The project cost is estimate at EUR 105 million (Rs. 20.6 b), of which the Government of Sri Lanka is financing EUR 30 million (Rs. 5.9 b). 

AFD Country Director in Sri Lanka Martin Parent stresses the importance of urban sanitation for the preservation of the country’s coastal environment: “Sri Lanka is known as ‘the Pearl of the Indian Ocean’. There is a challenge to preserve its fragile coastal ecosystem. The Government of Sri Lanka is fully committed to this and is massively investing in sewerage. I would like to emphasise this as it is very rare around the world to witness developing countries invest in this sector. We are proud to be a key partner of Sri Lanka to preserve its public health and environment, and therefore boost its blue economy potential.”

AFD is also considering supporting another emblematic project: the Jaffna Sanitation Project. Due to its peninsular location and arid climate, supplying water in Jaffna is particularly challenging. Groundwater, the main water resource, is terribly polluted due to the lack of an adapted sanitation system. This leads to major consequences on public health: dysentery cases are six times more common in Jaffna District than in the rest of the province. 

In this context, AFD is currently appraising the Jaffna Sanitation Project, which will work in tandem with a project supported by the Asian Development Bank towards ensuring quality water production and distribution to 60,000 households by 2021.

The Jaffna Sanitation Project aims at improving the living conditions of about 80,000 residents of Jaffna City, protecting the environment and supporting the agricultural and tourism sectors by providing an improved sanitation system. The project will also enhance the financial sustainability of the Sri Lankan water and sanitation sector by supporting the regulation of the water service, which will cover areas such as pricing and drinking water regular quality tests. AFD approval for this project is tentatively forecast in September 2019 with a possibility of EUR 123 million (Rs. 24 b) of financial assistance. 

Supporting fishing sector for better management of aquatic resources, better working conditions and improved product quality

Sri Lanka’s fishing sector provides employment to about 600,000 people (nearly 10% of the total labour force and a quarter of the agricultural sector’s employees). It forms an essential pillar to the country’s food security by supplying more than 60% of the animal proteins consumed by the population. The sector is also becoming an increasingly significant source of revenue in foreign currencies for Sri Lanka.

However, post-harvest losses (the deterioration of the product occurring between the catch of the fish and its sale to consumers) reach up to 40%, according to the Sri Lankan Ministry of Agriculture, Rural Economic Affairs, Livestock Development, Irrigation and Fisheries and Aquatic Resources Development. In order to reduce these losses, AFD is looking into financing a program to rehabilitate existing fishing harbours and to enhance their management as well as that of aquatic resources. 

This program will potentially target the harbours of Galle, Beruwala, Puranawella and Kudawella, located in South-Western Sri Lanka. This project marks AFD’s first intervention in Sri Lanka’s fishing sector and will mainly aim at improving the quality of products for export, without increasing the fishing effort. The feasibility study of this program, financed by a grant of EUR 650,000 from AFD (Rs. 128 million), was launched on 15 March. In total, the project will represent an investment of approximately 120 million euros (Rs. 23.6 b), of which a EUR 100 million (Rs. 20 b) are considered to be supported by AFD.

A flagship project for protection of Sri Lankan shoreline 

On 23 May, AFD launched a call for proposals for the project ‘Boosting the Potential of the Blue Economy: Conservation of the Sri Lankan Shoreline, Beaches and Waves’. The main objective of this project is to contribute towards the preservation of coastal biodiversity and natural heritage, to boost economic opportunities, and to reinforce social links. AFD has earmarked EUR 3 million (Rs. 600 million) to support a civil society organisation to implement this project.

Parent concludes: “Today, the oceans are more threatened than ever. Plastic litter, water pollution, overfishing and uncontrolled urbanisation are global as well as local challenges. Sri Lanka, being an island, is very aware of this reality. It is home to an exceptional biodiversity and marine resources with challenges regarding its coastal development. France has a lot to share with Sri Lanka regarding the Blue Economy. Having the second largest Exclusive Economic Zone in the world, France believes that marine resources are an asset for sustainable development and knows how difficult it is to preserve its potential. In this regard, AFD wishes to support efforts on environmental protection and climate change issues in Sri Lanka.”

Finally, AFD also recognises that joining multi-lateral initiatives is likely to have a greater impact when supporting regional, and even worldwide, projects related to preserving oceans. Most recently, AFD joined the Clean Oceans Initiative. Working towards the reduction of ocean pollution, the Clean Oceans Initiative supports projects that reduce the amount of marine litter (especially plastic) and untreated water discharge reaching the sea. The Ratmalana-Moratuwa sanitation project itself benefits from this label.