Climate finance a reservoir, but Sri Lanka lacks pipelines

Last Updated on January 27, 2025 5:51 am

Urban landscapes in Sri Lanka are no strangers to climate induced disasters. The country, being a tropical island in the Indian Ocean, has been identified among the top ten nations at risk of extreme weather events by the Global Climate Risk Index.

The urban dwelling setups in the island nation are increasingly vulnerable to disasters such as intense rainfalls, floods, droughts, heatwaves, and infrastructure loss due to unprecedented weather patterns, rising sea levels, and salinity intrusions.

Since early December 2024, the country has experienced severe adverse weather conditions, including heavy rainfalls, floods, and high winds, which severely impacted several districts across the island.

The Sri Lankan disaster management center reported that these conditions impacted approximately 475,225 individuals during the one-month period, while recording seventeen fatalities, numerous injured and nearly 7,300 displaced persons.

Severe rains also destroyed more than 2,500 houses.

This is just one example among many climate-driven disasters triggering immediate harm to people and infrastructure of this island nation. But there are also longer-term dangers that are slowly destabilizing Sri Lankan economy and local communities.

For example, the rising sea levels are causing erosion in the country’s coastal parts, resulting in the loss of land, fresh water, and the degradation of marine ecosystems, which in turn are impacting the economic and food security of affected communities.

This phenomenon has direct and indirect impact on inland and outbound migrations. Sri Lanka’s efforts to address these issues remain hampered by significant gaps in governance, institutional readiness, and access to climate finance.

At a side event discussion at COP29, titled “Raising the Ambition of Urban Climate Action through Multilevel Governance,” Sri Lankan Environmental Ministry Director Dr Leel Randeni outlined the country’s governance mechanisms, emphasizing the establishment of top-level committees co-chaired by secretaries and ministries overseeing sectoral coordination.

These committees manage areas such as health, environment, tourism, and energy, integrating measures with the country’s Nationally Determined Contributions (NDCs) and the National Adaptation Plan (NAP).

“Our sectoral coordination mechanisms ensure implementation, monitoring, and progress evaluation. For instance, our decarbonization projects are closely monitored, but we are equally focused on adaptation measures to ensure resilience,” Dr Randeni explained.

He also spoke about the sub-national interventions enabled by constitutional amendments such as the 13th Amendment, which allow for regional adaptation plans.

“We now have nine provincial climate units that have developed their own regional adaptation plans. These units are supported by climate finance, technology transfers, and capacity-building initiatives such as the Climate Smart Village program and city-level climate action projects,” he said.

COP29 served as a platform for nations to showcase their climate commitments and strategies and to receive climate funds.

Sri Lanka reiterated its ambitious goals of achieving 70% renewable energy by 2030 and reaching carbon neutrality by 2050. But, translating these aspirations into actionable outcomes requires more than declarations. It demands systemic reforms, multilevel coordination, and significant financial resources.

“The way we see the climatic conditions should change from mere mitigation efforts to adaptation strategies,” said Dr Thusitha Sugathapala, a key delegate representing the nation.

Sugathapala is a senior technical expert on climate change and sustainable development at SLYCAN Trust and a senior lecturer in mechanical engineering at the University of Moratuwa.

Discussing the importance of localizing global frameworks to address Sri Lanka’s unique challenges, Sugathapala said, “Sri Lanka needs more than policy-level changes. We must ensure that grassroots challenges are addressed, and governing structures are robust enough to implement solutions effectively.”

However, the nation’s approach to governance has been criticized for its top-down structure, which often excludes meaningful engagement with local communities.

Dr Sugathapala described the issue “Climate finance is like a reservoir. While the funds exist, Sri Lanka lacks the pipelines to access and channel them effectively.”

Climate finance is a critical lifeline for developing countries such as Sri Lanka. Global funds such as the Green Climate Fund (GCF) and Adaptation Fund offer substantial resources, but accessing these funds remains a significant challenge for the island nation.

Dr Sugathapala explained the systemic barriers like inadequate data systems, institutional weaknesses, and limited capacity to develop and implement viable project proposals, which are preventing the nation from tapping into available climate finance.

One of the most pressing challenges is the lack of dependable, quality-controlled baseline data. “Even to set the baseline, we don’t have reliable data,” Sugathapala added.

According to this expert, baseline data for emissions and adaptation needs are either unavailable or poorly analyzed. Capacity gaps persist in each level, from technical expertise to institutional readiness.

Additionally, while policies like the National Environment Action Plan provide a framework, their operationalization remains fragmented. These deficiencies hamper the country’s ability to meet international standards and prepare competitive project proposals.

While initiatives like the Climate Smart Governance Dashboard aim to address these gaps, they remain in their infancy and are not yet operational at all governance levels.

While most developing nations face similar challenges in accessing climate finance, the issue is particularly distinct in Sri Lanka due to its lack of coordination among government agencies and insufficient engagement with international donors.

“We need to build trust with financiers by demonstrating our commitment to transparency and accountability,” Dr. Sugathapala emphasized.

He pointed out that institutional capacity is another important barrier. Sri Lanka’s experience with technology transfer has often been limited to equipment transfer; in most situations this left the country dependent on external expertise.

This dependency on others limits the development of local home-based solutions and suppresses homegrown innovation.

Multilevel governance was one of the most discussed themes at COP29, and this approach is essential for Sri Lanka, where urban climate challenges require solutions that integrate local and global perspectives.

Yet, Sri Lanka’s efforts in implementing multilevel governance remain fragmented. Stakeholder engagement, an important aspect of this approach, often occurs late in the policymaking process, limiting its effectiveness.

“We need a multi-stakeholder engagement platform to ensure inclusivity from the beginning,” Sugathapala said.

He added that the private sector in Sri Lanka has made much progress, particularly in adopting Environmental, Social, and Governance (ESG) frameworks. Companies in renewable energy and waste management sectors have shown initiative, but these efforts remain inaccessible without broader government support.

One such promising development is the accreditation of DFCC Bank by the Green Climate Fund. This milestone enables Sri Lanka to directly access GCF funding, bypassing the need for intermediary organizations.

Yet, this progress is undermined by the limited capacity of local institutions to prepare and execute bankable projects.

Dr Randeni said, “These kinds of progress are undermined by the limited capacity of local institutions to prepare and execute bankable projects. We need leadership that creates enabling conditions rather than centralizing control.”

Article 6 of the Paris Agreement – which focuses on carbon markets – represents a significant opportunity for private sector engagement. However, Sri Lanka has yet to develop a clear strategy for Article 6, limiting its ability to leverage this mechanism.

“The absence of a defined strategy for Article 6 is a significant barrier,” Sugathapala further stated.

International partnerships also play a crucial role in Sri Lanka’s climate action. Organizations like UNDP, IRENA, and UNESCO-IHP have collaborated on various initiatives, but these partnerships often lack continuity.

The island nation had a limited participation at COP29 due to the recent political transitions and funding limitations.

“Participation is not just about showing up,” said Dr Sugathapala, adding, “It is about networking, forming partnerships, and ensuring our needs are articulated on the global stage.”

COP29 featured numerous side events that showcased the best practices in renewable energy, adaptation technologies, and governance models. Sri Lanka’s limited participation meant missing out on valuable insights and potential collaborations.

Dr Sugathapala highlighted Sri Lanka’s reliance on external technology, often limited to equipment transfer rather than full technological integration. “70% of the value addition in wind energy happens outside Sri Lanka,” he explained.

This dependency stifles local innovation and long-term sustainability.

He stressed the need for “hardware, software, and orgware,” a comprehensive approach that includes equipment, knowledge systems, and institutional capacity.

While projects such as the Climate Smart Governance Dashboard and TNA (Technology Needs Assessment) provide a starting point, they lack the scale and depth required for transformative impact.

Sri Lanka’s centralized governance model poses another obstacle for its effective climate action.

Gaps between central, provincial, and local governments hinder effective multi-level governance. Initiatives like the Climate Smart Governance Dashboard aim to bridge these gaps, but their implementation is still in the pilot stages.

Moreover, public participation can be seen on an extremely limited scale. “On paper, we have mechanisms for civil society engagement,” he said, referencing registration processes for environmental NGOs. “But these are not fully operationalized.

“Most NGOs work in local languages and lack the communication channels to engage at the national level.”

Dr Sugathapala called for the establishment of multi-stakeholder platforms to ensure broader participation in policymaking and implementation.

Sri Lanka’s ambitious targets of 70% renewable energy by 2030 and net-zero emissions by 2050 were another focal point. While the country has made a little progress with solar rooftop systems, achieving these goals remains challenging, especially given the lack of localized technology and testing facilities.

“We do not even have facilities to evaluate solar panel efficiency,” Dr Sugathapala said, “Yet we are aiming for 8,000 megawatts of renewable energy by 2030. It is not sustainable without the right infrastructure.

“We need to invest in our people as much as in technology and the government must take leadership, not ownership.”

Dr Randeni too echoed the same, saying, “We are in need to move beyond equipment transfers to knowledge sharing and local capacity building. This is how we can develop homegrown solutions rather than relying on external expertise.”