ECONOMYNEXT – Manila based Asian Development Bank has picked Sri Lanka as a priority country to pilot a new financing approach to conserve and build ‘natural capital’, Kenichi Yokoyama, Director General, South Asia Department said.
Natural capital could include forests, wetlands, marine eco-systems and also agricultural areas. The ADB has set up a division focusing on natural capital and climate, is drawing up a blueprint on how the lender can help enhance such assets.
“Sri Lanka was selected as a priority pilot country to country implement some of these approaches,” Yokoyama told a forum.
ADB support will be available in the form on knowledge, capacity development as well as funding and scaling up existing practices.”
Sri Lanka’s Peradeniya University will be partner for knowledge transfer.
The ADB is financing Sri Lanka with budget support loans under an IMF program, which are linked to policy actions. Among the areas the agency will fund is renewable energy and climate, with the immediate focus on economic and financial stability.
Several countries have started to issue green and blue bonds (linked to marine eco-systems) which are linked to targets on improving environment or actual conservation of biodiversity. Natural capital has to be identified and valued.
Academics in Sri Lanka universities have previously conducted studies on natural capital.
Sri Lanka needs more assessment and policy actions to enable natural capital linked financing, in the ADB will help, Sanath Ranawana, Principal Water Resources Specialist, ADB, South Asia said.
A natural capital assessment is now being conducted guided by the ADB, Rafael Schmitt, Lead Scientist, Natural Capital Project at Woods Institute for the Environment, Stanford University, USA said.
The information could be used for financing and debt for nature swaps, he said.
Sri Lanka has recently developed a framework for green and blue bonds. Sri Lanka is also and is developing an action plan and improving laws on climate, Anil Jasinghe, Secretary to the Ministry of Environment said. (Colombo/June05/2023)