ADB Approves $100 Million Loan for Technical and Vocational Training

COLOMBO, SRI LANKA – The Asian Development Bank’s (ADB) Board of Directors has approved a $100 million loan to help the government of Sri Lanka revamp its technical and vocational education and training (TVET) which will equip youth with the required skills for the job market.

The program will support the government’s Skills Sector Development Program which aims to improve the employability of youth.

“This program will help reduce the significant mismatch that exists between the competencies of graduates and labor market demand, which has left youth unemployment very high at 17.3%,” said Sungsup Ra, Director for Human and Social Development, in ADB’s South Asia Department.

The skills mismatch has become even more evident during the recent period of economic growth, as both education and TVET systems have not been able to adapt to the rapid labor market shifts. Private sector employers often cite a lack of skilled workers matching their needs.

Under the new program, the government will introduce a targeted stipend scheme for disadvantaged groups, including the poor, women, and school drop-outs, to increase their participation in skills training in areas where there is a skills shortage. Though a large number of women are enrolled for training in traditionally female occupations, women’s participation is low at around 26% in technology-related courses that would lead to higher-paying jobs. The program therefore aims to increase women’s participation in TVET and improve their rates of employment, especially in the four priority sectors of construction, tourism, information technology, and manufacturing.

The loan marks the second results-based lending (RBL) program approved by ADB, which links loan payments to the achievement of goals. As a prerequisite of RBL, the government adopted a sector results framework and a medium term expenditure framework with which relevant development partner support can be aligned. RBL will help the government prioritize actions that are contributing most to the goal of youth employability.