UN, govt. step up efforts to implement Climate Finance Project in Sri Lanka

As Sri Lanka is particularly susceptible to the negative impacts of climate change as a small island and developing nation, efforts have been taken by the United Nations Development Programme in Sri Lanka (UNDP) to partner with the Environment and Finance Ministries to implement the Climate Finance Network (CFN) Project. 

The project is regionally initiated by the UNDP and funded by the Foreign, Commonwealth and Development Office of the Government of the United Kingdom’s Climate Action for a Resilient Asia initiative. 

Recognising the importance of contributing towards a greener future, Sri Lanka updated its Nationally Determined Contributions (NDCs) pledging to achieve a carbon Net Zero status by 2050 and even more recently announced its Climate Prosperity Plan at United Nations Climate Change Conference 2022 (COP27) to combat the threat of climate change.  In the aftermath of the COVID-19 pandemic, Sri Lanka has had to face unprecedented economic hardships with resources being diverted to address the immediate crisis. However, as a country dependent on natural resources for its economy and employment generation, increased climate externalities continue to impact the lives and livelihoods of the people and economy.  

The project aims to address the barriers in achieving the Sustainable Development Goals (SDGs) and NDC commitments, while enabling countries to effectively mobilise, manage, utilise and track the use of public finance and climate-aligned private investments to combat climate change effectively whilst promoting gender equality, human rights and poverty reduction to contribute to the implementation of the 2030 Agenda.   

The CFN Project will be focusing on four areas in Sri Lanka, namely climate change-aligned budgeting and planning, direct access to international climate change finance, transparency and accountability of climate change finance and gender and social inclusion in climate change finance.  

Speaking at the inception workshop of the project, Environment Minister Naseer Ahamed noted that according to the assessment conducted by BIOFIN, Sri Lanka may face a 1.2 percent loss of annual GDP by 2050, if measures are not taken to address climate change. “Achieving these planned targets in climate change and transitioning towards a green, inclusive and balanced economy in Sri Lanka requires large investments from the financial sector, which is an opportune moment for the UNDP’s Climate Finance Network Project,” he said.

According to Environment Ministry Secretary Dr. Anil Jasinghe, the CFN Project will strengthen the capacity to access finance and technology and become the overarching project on climate financing.  “In order to do this, we must reform our financial mechanisms. In the context of the present economic crisis, we are thankful to the UNDP for its support,” he stressed.  Further, UNDP Sri Lanka Officer-in-Charge Malin Herwig pointed out that Sri Lanka seeks to create an enabling environment to access climate finance and institute innovative and sustainable financing mechanisms that not only work towards climate resilience but also towards balanced and inclusive green growth. The CFN brings together many sectors, tying together the economy, environment and society in the way SDGs do.