Statement delivered by Hon. Shehan Semasinghe, State Minister of Finance, Sri Lanka
V20 MINISTERIAL DIALOGUE XII
16 April 2024
Washington D.C., USA
Hon. Shehan Semasinghe, State Minister of Finance, Sri Lanka
Thank you, Chair.
Sri Lanka is among one of the many countries that experienced the severe adverse impacts of COVID-19 pandemic, conflicts between nations and multiple exogenous shocks. Â Following its socioeconomic crisis, Sri Lanka commenced a deep and wide-ranging economic reform program to address fundamental macroeconomic vulnerabilities that contributed to the economic crisis.
In 2022, Sri Lanka embarked on a IMF and World Bank supported reform program that included significant fiscal reforms, monetary policy adjustments, financial sector stabilization, debt restructuring, welfare reforms and governance reforms. But today, I wish to touch upon access to climate finance. The country’s need for a robust capital asset base requirement to meet the challenges arising from climate vulnerabilities and sustainability initiatives are significant.
The Climate Prosperity Plans launched at the COP27 articulates the country’s priorities and the way forward. It is the roadmap to attract foreign investments for boosting economic growth and employment generation in Sri Lanka, while accelerating climate adaptation and bringing down the country’s greenhouse gas emissions as it transitions towards net negative emissions.
Sri Lanka has set a target for increasing the country’s renewable energy generation from 35 percent to 70 percent by 2030. Further, the transport, forestry, water and tourism sectors have similarly ambitious aims. Therefore, the country’s plan provides a pathway for Sri Lanka to become a carbon negative economy before the mid of this century.
We are mindful that CPPs are successful to the extent that the risk appetite of the private sector is matched with the return. To attract private investors to CPPs, it is important that there is a mechanism to mitigate the risks involved in a CPP. Such de-risking requires cooperation from multilateral partners through mechanisms such as the issuance of collaterals, et cetera. We are aware that the risk factors emerge due to the asymmetry of information that arises due to lack of data and research into a number of privatized areas. It is noted that most developing and emerging countries would find it challenging to access data, although available elsewhere, and will not have access to technologies that provide more accurate data.
This will not help in mitigating risk of most of the public investments, especially in mitigation and adaptation designed to attract private capital. The multilateral institutions can support sharing of data and access to new technologies in designing projects, together with archiving of data, which will minimize risks of support for such projects.
I’m pleased to announce that Sri Lanka has already initiated work on drafting a Marine Spatial Plan. We hope that this will also support the country’s plan to create an enabling environment to access green or blue financing in the years to come.
In conclusion, I wish to flag that without support from multilateral and other partners this will be a challenging task and therefore let us strengthen collaboration among V20 members.
Thank you.
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