ADB approves $ 100 m loan to boost skills development and jobs for youth in Sri Lanka

Friday, 2 October 2026 00:23 - - {{hitsCtrl.values.hits}}

The Asian Development Bank (ADB) has approved a $ 100 million results-based loan to help Sri Lanka transform its technical and vocational education and training (TVET) system, equip more young people with industry-relevant skills, and strengthen the country’s competitiveness and inclusive growth.

The Skills Development System Transformation Program will support the Government’s efforts in improving the quality and relevance of skills training, strengthening links between training providers and industries, and expanding employment opportunities for youth.

The program will increase women’s employment opportunities in non-traditional jobs in fields including automotive technology, engineering, information and communications technology, construction, and renewable energy.

ADB Country Director for Sri Lanka Shannon Cowlin said: “A skilled workforce is essential to Sri Lanka’s long-term economic transformation and competitiveness. This program will help create stronger pathways from education to employment by making training more responsive to industry needs, expanding opportunities for young people and women, and ensuring that graduates have the skills required by a modern and evolving economy.”

Though Sri Lanka’s economy is recovering, it faces skills shortages in priority sectors, high youth unemployment, and low female labour force participation. Many employers report difficulty finding workers with the skills needed in a changing economy.

Aligned with the Government’s TVET Sector Strategic Framework 2026–2035, the nationwide program will be implemented from 2027 to 2031 and is expected to directly benefit more than 100,000 young people through improved access to quality, employment-oriented training.

The program will provide expanded career guidance for secondary school students, enhanced capacity-building activities for teachers, and improved coordination between schools and training institutions. To modernise TVET delivery, the program will establish a centre of excellence for automotive technology, introduce a hub-and-spoke training model across all nine provinces, upgrade learning facilities, and launch new industry-aligned courses in priority sectors. It will also deepen partnerships between training providers and employers through workplace-based learning, industry participation in skills assessment and certification for learners, and stronger mechanisms for private sector engagement.

The program will improve governance and quality assurance through a national accreditation system, performance-based financing mechanisms, and a unified digital training management information system that will align skills development with labour market demand.

The financing consists of a $ 50 million regular loan, a $ 50 million concessional loan, and a $ 500,000 technical assistance grant from the ADB.