More than 380,000 people in Sri Lanka are expected to benefit from a new $100 million partnership between the Government of Sri Lanka and the World Bank Group. The initiative is designed to strengthen rural livelihoods, create jobs, and build climate resilience in the country's agri-food sector.
The Integrated “Rurban” (Rural and Urban) Development and Climate Resilience Project will directly support 8,000 agri-food producers. It aims to improve irrigation and drainage services across 71,000 hectares of land while helping smallholder farmers adopt modern, climate-smart agricultural practices. These measures are intended to increase harvests and reduce losses. The project also seeks to generate new jobs in rural areas, with a focus on opportunities for youth and women by strengthening agribusiness value chains and expanding market access.
Dr. Harshana Suriyapperuma, Secretary to the Treasury and the Ministry of Finance, Planning and Economic Development, said: “The National Policy Framework of the Government, ‘A Thriving Nation - A Beautiful Life’ has given utmost priority in attaining sustainable economic growth and development through a robust production economy. This project financed by the World Bank, one of Sri Lanka’s prominent development partners, will complement the Government’s vision through enhancing agricultural productivity, stimulating rural development, and contribute towards safeguarding food security.”
Smallholder farmers produce about 80% of Sri Lanka’s food supply. As climate change leads to more unpredictable rainfall patterns, higher temperatures, floods, and droughts, this project will upgrade irrigation systems so that farmers can manage water more effectively. It will also promote modern technologies for boosting crop yields and reducing losses. Additional components include expanding access to crop insurance and investing in infrastructure that helps farmers adapt to climate-related challenges.
The project includes plans to upgrade agriculture data systems and improve food safety standards. These efforts aim to help local farmers compete internationally and access export markets.
David Sislen, World Bank Division Director for the Maldives, Nepal and Sri Lanka stated: “This project is about people, government, and the private sector working together to make real improvements on the ground. By combining climate-smart farming with access to markets and private finance, we are not just helping farmers adapt to climate change—we’re helping them succeed in spite of it.”
The initiative also aims to attract up to $17 million in private investment by linking farmers with financial institutions. This could unlock loans for agribusinesses as well as create income opportunities in processing, storage, logistics, and marketing.
This new effort builds on over ten years of World Bank Group support for Sri Lanka’s agriculture sector. Previous projects resulted in forming 141 farmer organizations and farmer-owned businesses while increasing average farmer sales by 44%. The International Finance Corporation (IFC), part of the World Bank Group focused on private sector development, has contributed technical expertise as well as financial tools for key export industries such as cinnamon and coconut.
The project aligns with both Sri Lanka’s national development goals and the World Bank Group’s Country Partnership Framework.