The Asian Development Bank has approved a US$ 100 million results-based loan to restructure Sri Lanka’s technical and vocational education and training (TVET) system, in a programme aimed at closing the gap between what training institutions teach and what employers actually need.
The Skills Development System Transformation Program will support government efforts to improve the quality and relevance of skills training, strengthen links between training providers and industry, and widen employment opportunities for young people.
The financing is split between a $50 million regular loan and a $50 million concessional loan, with a $500,000 technical assistance grant from ADB.
What it funds
The nationwide programme is aligned with the government’s TVET Sector Strategic Framework 2026–2035 and will be implemented from 2027 to 2031. ADB expects it to directly benefit more than 100,000 young people through improved access to employment-oriented, quality-assured training.
Planned measures include:
- A centre of excellence for automotive technology
- A hub-and-spoke training model across all nine provinces
- Upgraded learning facilities and new industry-aligned courses in priority sectors
- Expanded career guidance for secondary school students and capacity-building for teachers
- A unified digital training management information system to align skills development with labour market demand
- Deeper training provider–employer partnerships through workplace-based learning
The programme also explicitly targets women’s employment in non-traditional occupations, naming automotive technology, engineering, information and communications technology, construction and renewable energy.
The problem it addresses
“A skilled workforce is essential to Sri Lanka’s long-term economic transformation and competitiveness,” said ADB Country Director for Sri Lanka Shannon Cowlin. “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.”
ADB said that although the economy is recovering, Sri Lanka still faces skills shortages in priority sectors, high youth unemployment and low female labour force participation, with many employers reporting difficulty finding workers with the skills a changing economy requires.
The approval was reported by Daily FT and Lanka Business Online. ADB’s own announcement carries a Colombo dateline of 29 September 2026.
