ECONOMYNEXT – Sri Lanka’s Cabinet of Ministers has approved a proposal to obtain USD 100 million from the Asian Development Bank (ADB) to implement the Sustainable Tourism Sector Development Programme (STSDP) in the country, the government said.
Out of this ADB loan, USD 70 million will be obtained from concessionary general capital resources and USD 30 million from permanent general capital resources, the government said in its cabinet decision document.
“Clearance have been granted by the Central Bank of Sri Lanka and the Attorney General’s Department to obtain the above loan facility,” it said.
The Cabinet has granted approval to enter into agreements with the ADB to obtain the loan grant for the activities of sustainable tourism sector development programme.
Sri Lanka’s Sustainable Tourism Sector Development Programme (STSDP) represents a pivotal ADB-backed initiative to revitalize the nation’s tourism industry, a sector that contributed 5% to GDP at its peak in 2018 and employing 2.5 million people pre-crisis.
Approved in 2024 with an initial $100 million policy-based loan for Subprogram 1 under ADB project, the STSDP aims to foster a resilient, inclusive, and eco-friendly tourism ecosystem by targeting $5 billion in foreign exchange earnings by 2025 through private sector-led reforms and catalytic investments in infrastructure, such as upgrading eco-lodges, coastal pathways, and digital booking platforms in underserved regions like the Eastern Province.
Aligned with Sri Lanka’s National Tourism Policy (NTP) and ADB’s Strategy 2030 which emphasizes operational priorities like public financial management, green growth, and inclusion, the program integrates sustainability criteria from the Global Sustainable Tourism Council (GSTC), promoting community-based enterprises, biodiversity conservation in protected areas, and gender-inclusive job training to empower women and youth in rural tourism hotspots.
The goals include spreading development beyond Colombo and the South to ethnic-minority areas and leveraging public-private partnerships for heritage preservation and low-carbon transport. The program supports UN Sustainable Development Goals while positioning tourism as an engine for equitable recovery amid projections of 3 million annual visitors by 2026.
Sri Lanka has aimed at ambitious 3 million tourist arrivals and USD 5 billion revenue targets for this year. (Colombo/November 04/2025)