ADB Approves $100 Million to Build Job Skills for Young Sri Lankans

ADB’s $100 million loan package consists of a $50 million regular loan and a $50 million concessional loan, with an additional $500,000 technical assistance grant supporting the program.

More than 100,000 young people in Sri Lanka are expected to benefit from a nationwide skills training overhaul backed by a $100 million results-based loan approved by the Asian Development Bank (ADB). The Skills Development System Transformation Program will help connect technical and vocational education more closely with the jobs employers need to fill, giving young people better access to practical, employment-focused training and supporting the country's competitiveness and inclusive economic growth.

Connecting classroom learning with real job opportunities

Sri Lanka's recovering economy continues to face a difficult gap between the skills businesses need and those available among people looking for work, with employers reporting shortages in priority sectors despite high youth unemployment. Low female participation in the workforce adds to the challenge, making access to relevant training and employment opportunities an important part of the country's economic recovery. The program will support government efforts to improve the quality and relevance of technical and vocational education and training, known as TVET, and strengthen relationships between training institutions and industry.

Women will receive greater support to enter occupations in fields where they have traditionally had fewer employment opportunities, including automotive technology, engineering, information and communications technology, construction, and renewable energy. ADB Country Director for Sri Lanka Shannon Cowlin said a skilled workforce is essential to the country's long-term economic transformation and competitiveness, describing the program as a way to build stronger connections between education and employment through training that responds to industry needs and prepares graduates for a changing economy.

Modern training facilities across all nine provinces

Scheduled for implementation from 2027 to 2031, the program follows the government's Technical and Vocational Education and Training Sector Strategic Framework 2026–2035 and will reach all nine provinces. Plans include a centre of excellence for automotive technology, upgraded learning facilities and new courses shaped around the needs of priority industries. A hub-and-spoke training model will connect central training hubs with a wider network of institutions, supporting the delivery of modern vocational education across the country.

Secondary school students will have access to expanded career guidance to help them understand their options before choosing a training or employment pathway, supported by closer coordination between schools and training institutions. Teachers will receive additional professional development, and stronger partnerships with employers will create more opportunities for workplace-based learning. Industry representatives will have a greater role in assessing learners' skills and certification, helping connect the qualifications students earn with the capabilities businesses expect when recruiting.

Funding and oversight tied to better training outcomes

Changes to the way the TVET system is managed will include a national accreditation system, stronger quality assurance and performance-based financing mechanisms. A unified digital training management information system will support coordination and help align skills development with labour market demand, giving the reform a common information framework alongside improvements to teaching and facilities. Stronger arrangements for private sector engagement will give employers a more active role in shaping a training system that responds to employment needs.

ADB's $100 million loan package consists of a $50 million regular loan and a $50 million concessional loan, with an additional $500,000 technical assistance grant supporting the program. The results-based financing approach links funding to agreed results, placing emphasis on what the reforms deliver. For the young people expected to benefit directly, the program is designed to make quality vocational training more accessible and create clearer routes into employment, with particular attention to opportunities for women and the skills needed by growing industries.