Climate ambition alone won’t pay bills, Sri Lanka warned

From left: CCC Secretary General/ CEO Shiran Fernando, Asian Development Bank (ADB) Country Director for Sri Lanka Shannon Cowlin, UN Food and Agriculture Organisation (FAO) Representative for Sri Lanka and the Maldives Vimlendra Sharan, and Dilmah Tea Chairman and CEO Dilhan Fernando 

– Pic by Nisal Baduge

• Development partners says SL must convert its climate ambitions, vulnerabilities and policy commitments into structured, financeable and scalable investments if it hopes to unlock larger flows of climate funding
• Stresses climate resilience must be embedded across critical sectors including energy, water and infrastructure,

By Shabiya Ali Ahlam

Sri Lanka must urgently strengthen its pipeline of bankable climate projects or risk missing out on much-needed climate finance and losing ground in increasingly climate-conscious global markets, development partners and business leaders warned.

While the country has made significant strides in rebuilding its economy following the 2022 crisis, and has demonstrated growing ambition on climate action, speakers at the  Sri Lanka Climate Summit 2026, organised by the Ceylon Chamber of Commerce (CCC), stressed that ambitions alone would not be sufficient to attract investment or shield key export sectors from mounting climate-related risks.

“Sri Lanka is climate-vulnerable, yet climate-ambitious. What is not given is the more important question: Is Sri Lanka climate investment-ready? My own perception is that this is a journey which we have just begun,” UN Food and Agriculture Organisation (FAO) Representative for Sri Lanka and the Maldives Vimlendra Sharan said.

Speaking during a panel discussion, Sharan noted that Sri Lanka must convert its climate ambitions, vulnerabilities, and policy commitments into structured, financeable, and scalable investments if it hopes to unlock larger flows of climate funding.

Despite progress through frameworks such as Nationally Determined Contributions (NDC) 3.0 and growing engagement from both the private and financial sectors, he said major gaps remain, particularly in the availability of bankable projects, project preparation capacity, and reliable climate-related data.

Climate change increasingly moves beyond an environmental issue to become a competitiveness issue for exporters, particularly those dependent on agricultural supply chains.

Dilmah Tea Chairman and CEO Dilhan Fernando noted climate adaptation was no longer optional, describing it as “another word for survival” for sectors such as tea, cinnamon, and other export crops that depend heavily on stable environmental conditions.

He cautioned that Sri Lankan exporters are facing a rapidly changing regulatory landscape in major markets, particularly Europe, where new sustainability-related regulations are expected to tighten market access requirements.

“You have EUDR coming in August this year, you have Packaging Waste Regulation in September, and you have the EU Green Claims Directive. That is going to be an active deterrent to exporters who are not compliant,” Fernando said.

The challenge extends beyond individual exporters, he noted, warning that entire supply chains will increasingly be scrutinised for environmental compliance.

“If we are using a packaging supplier who is unable to validate the source of their raw material, you don’t get in,” he said.

Fernando also cationed that increasingly erratic weather patterns threaten both the quality and quantity of agricultural exports, particularly tea, with prolonged droughts and intense rainfall events becoming more frequent.

“When quality is affected, that is a prelude to a collapse of quantity,” he said, adding that Sri Lanka’s annual tea production target of 400 million kilogrammes could become increasingly difficult to achieve if climate extremes continue to intensify.

Supporting the call for greater climate preparedness, Asian Development Bank (ADB) Country Director for Sri Lanka Shannon Cowlin said Sri Lanka’s recent economic recovery has strengthened its ability to withstand climate shocks, highlighting the importance of maintaining macroeconomic stability alongside climate investments.

“You cannot eliminate all risk. The overall macroeconomic stability of the country is really important. We saw that last year when the country had a much stronger response to Cyclone Ditwah than it would have had a few years prior.”

She noted that climate resilience must be embedded across critical sectors, including energy, water, and infrastructure, stressing that financially sustainable utilities are essential to maintaining resilient systems.

“A bankrupt utility is not going to be maintaining a resilient system,” she said.

Cowlin also highlighted ADB’s upcoming emergency assistance programme linked to Cyclone Ditwah recovery efforts, which will focus on “Build Back Better” principles, including slope stabilisation, drainage improvements and stronger infrastructure standards designed to withstand future extreme weather events.

While opportunities exist to access global climate finance and position the country as a sustainable export destination, they warned that success will depend on Sri Lanka’s ability to develop investment-ready projects, strengthen institutions, and build climate resilience across the economy.