Sri Lanka : Sustainable Tourism Sector Development Program (Subprogram 1)
The Sustainable Tourism Sector Development Program aims to support the Government of Sri Lanka in creating a resilient, inclusive, and sustainable tourism sector by boosting tourist arrivals and foreign exchange earnings from tourism, achieving at least $5 billion in foreign exchange earnings from tourism by 2025, and by leveraging private sector participation (PSP) through strategic reforms and targeted catalytic investments. The program combines a policy-based loan (PBL), to be delivered through a programmatic approach, with two subprograms and a project investment component. The proposed reforms under the PBL component address the binding constraints faced by the tourism sector and businesses; and are aligned with Sri Lanka's National Tourism Policy (NTP), a 10-year policy document with the vision of transforming the tourism sector as the major engine of inclusive economic growth and sustainable development.
Project Details
-
Project Officer
Morsheda, Elma
Sectors Group
Request for information -
Country/Economy
Sri Lanka -
Sector
- Water and other urban infrastructure and services
- Project Name
- Sustainable Tourism Sector Development Program (Subprogram 1)
- Project Number
- 57227-001
- Country / Economy
- Sri Lanka
- Project Status
- Proposed
- Project Type / Modality of Assistance
- Loan
- Source of Funding / Amount
-
Loan: Tourism Sector Development Program (Subprogram 1) Source Amount Ordinary capital resources US$ 70.00 million Loan: Sustainable Tourism Sector Development Program (Subprogram 1) Source Amount Ordinary capital resources US$ 30.00 million - Operational Priorities
- OP1: Addressing remaining poverty and reducing inequalities
- OP2: Accelerating progress in gender equality
- OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
- OP4: Making cities more livable
- OP6: Strengthening governance and institutional capacity
- OP7: Fostering regional cooperation and integration
- Sector / Subsector
Water and other urban infrastructure and services / Other urban services - Urban policy, institutional and capacity development
- Gender
- Effective gender mainstreaming
- Description
The Sustainable Tourism Sector Development Program aims to support the Government of Sri Lanka in creating a resilient, inclusive, and sustainable tourism sector by boosting tourist arrivals and foreign exchange earnings from tourism, achieving at least $5 billion in foreign exchange earnings from tourism by 2025, and by leveraging private sector participation (PSP) through strategic reforms and targeted catalytic investments. The program combines a policy-based loan (PBL), to be delivered through a programmatic approach, with two subprograms and a project investment component. The proposed reforms under the PBL component address the binding constraints faced by the tourism sector and businesses; and are aligned with Sri Lanka's National Tourism Policy (NTP), a 10-year policy document with the vision of transforming the tourism sector as the major engine of inclusive economic growth and sustainable development. The investment component will support sustainable tourism and urban development of the two destinations to enhance visitors' experience, expand the green economy, and enhance urban livability.
The program is consistent with strategic objective 1 (strengthening public financial management and governance), 2 (fostering private sector development promoting green growth), and 3 (improved access to climate-smart public services and deepening inclusion) of the Asian Development Bank's (ADB) Country Partnership Strategy, 2024-2028 for Sri Lanka; and operational priorities 1, 2, 3, 4, 6, and 7 of ADB's Strategy 2030. It will support Sustainable Development Goal 11 (sustainable cities and communities) by protecting natural and cultural heritage, supporting local businesses, and fostering entrepreneurship, thereby generating revenue for the government and creating job opportunities for women and disadvantaged groups. It is aligned with the goals of the Paris Agreement and will support the Government of Sri Lanka in achieving its national climate change strategies as detailed in its National Adaptation Plan and nationally determined contribution.
- Project Rationale and Linkage to Country/Regional Strategy
- Tourism in Sri Lanka has suffered major challenges because of the Easter Sunday attacks in 2019 and the coronavirus disease (COVID-19) pandemic, leading to a decline in tourist arrivals and earnings from the sector. To recover and make the sector sustainable, inclusive, and resilient, overarching strategies and well-sequenced investments are required which can be delivered through a well-structured sector development program (SDP). The proposed SDP adopts a programmatic approach with two subprograms to manage complex and multiyear reforms involving various ministries and other public sector entities and the private sector. The improved governance of the institutions operating in the tourism sector will be sustained through the operationalization of the reforms under the PBL component. The investment component will support Dambulla and Trincomalee, two strategic tourism destinations, through infrastructure development and capacity building that will enhance the value proposition of these tourist destinations. Subprogram 1 will support reform actions to strengthen the institutional coordination of ministries and agencies; address policy and regulatory gaps in the tourism sector; and develop strategies and guidelines for skills enhancement following international standards, improve participation of women and disadvantaged groups, PSP, and resource mobilization. Subprogram 2 will support a policy reform involving the amendment of Tourism Act 2005 or enactment of a new Tourism Act in 2025, which will address the policy, regulatory, and procurement reforms needed for sustainable promotion and enhance the enabling environment for PSP. Other reform areas include the implementation of the tourism strategic plan, and registration and performance assessment of the tourism establishments following international standards. These are linked to tourist satisfaction, additional arrivals, and time spent; and will lead to increased tourism revenue, tax collection, and domestic resource mobilization. The reforms will also promote the participation of women and disadvantaged groups in tourism jobs and businesses and ensure the quality of the vocational training.
- Impact
Sustainable, climate-resilient, and inclusive tourism development ensuring balanced economic growth and attracting responsible international visitors and investors.
- Outcome
Tourism sector made resilient and inclusive through cohesive policies, planning, and targeted physical infrastructure investments.
- Outputs
Tourism destinations in Dambulla (including Sigiriya) and Trincomalee improved and made climate resilient and inclusive.
Destination management and a governance framework implemented for Sigiriya and Fort Frederick.
Capacity of the tourism organizations and community strengthened.
- Geographical Location
- Nation-wide
Safeguard Categories
- Environment
- B
- Involuntary Resettlement
- B
- Indigenous Peoples
- C
Summary of Environmental and Social Aspects
- Environmental Aspects
- Involuntary Resettlement
- Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
- During Project Design
- During Project Implementation
Contact
- Responsible ADB Officer
- Morsheda, Elma
- Responsible ADB Department
- Sectors Group
- Responsible ADB Division
- Water and Urban Development Sector Office (SG-WUD)
- Executing Agencies
-
Ministry of Finance, Economic Stabilization and National Policies
Timetable
- Concept Clearance
- 08 May 2024
- Fact Finding
- 25 Jun 2024 to 05 Jul 2024
- MRM
- -
- Approval
- -
- Last Review Mission
- -
- Last PDS Update
- 21 May 2024
Funding
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| Title | Document Type | Document Date |
|---|---|---|
| Sustainable Tourism Sector Development Program (Subprogram 1): Concept Note | Concept Papers | May 2024 |
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
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Evaluation Documents See also: Independent Evaluation
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Related Publications
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Procurement Plan
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