Business
Can Debt-for-Climate and Nature Swaps help make Sri Lanka’s debt more manageable?

Lakmini Fernando is a Research Fellow at IPS with primary research interest in Development Economics, Public Finance and Climate Change. She has expertise in econometric data analysis, research design and causal methodologies. Lakmini holds a BSc in Agriculture from the University of Peradeniya, a Master of Development Economics (Advanced) from the University of Queensland, Australia and a PhD in Economics from the University of Adelaide, Australia.
Sunimalee Madurawala is a Research Economist at the Institute of Policy Studies of Sri Lanka (IPS). She has over 15 years of research experience in the areas of gender, health economics and population studies. Sunimalee holds a BA (Economics Special) degree with a first-class and a Masters in Economics (MEcon) degree from the University of Colombo, Sri Lanka.
By Dr Lakmini Fernando and Sunimalee Madurawala
Sri Lanka’s economic crisis, fuelled by unsustainable debt and a default in 2022, left the country struggling to stabilise its economy. Its high climate vulnerability that disrupts livelihoods exacerbated the economic challenges. In the face of dual pressures from an economic crisis and climate vulnerability, the need for alternative approaches to financial recovery has never been more urgent. Therefore, debt-for-climate-and-nature (DfCN) swaps could be a possible option to lower the financial burden while addressing climate challenges.
The Need for Alternative Financing Options in Sri Lanka
Sri Lanka was forced to default on its external debt and seek a USD 3 billion bailout from the International Monetary Fund (IMF) in March 2023. Its total debt stock stood at USD 92 billion, with 40% being external debt in 2023. Sri Lanka’s debt portfolio is complex and its outstanding debt to China and India accounted for 18% of total external debt (59% of bilateral loans) in September 2022 (Figure 1). Amidst the conclusion of debt restructuring, Sri Lanka might benefit by opening to alternative financial instruments.

DfCN Swaps as an Alternative
DfCN swaps are a sovereign debt restructuring tool that helps (partial) restructuring of external debt in exchange for domestic investment in climate action. Well-designed DfCN swaps provide debtor countries the fiscal space to invest in climate adaptation and biodiversity sustainability.
With unsustainable debt and climate change identified as pressing issues for developing countries, Sri Lanka emerges as a priority country for DfCN swaps. Earlier, DfCN swaps followed a ‘piecemeal approach’ – implementing smaller, uncoordinated projects and managing funds through extrabudgetary channels. In contrast, recent swaps follow a ‘systematic approach’ – focusing on broader programmes instead of individual projects and providing budget support by channelling funds directly into debtor countries’ national budgets. This approach makes DfCN swaps more effective by mobilising larger amounts of funds, increasing debtor governments’ accountability, linking payments to performance, and aligning Nationally Determined Contributions (NDCs) and National Biodiversity Strategies and Action Plans (NBSAPs) in target setting.
Global Context and Debt Swap Options for Sri Lanka
DfCN swaps was first introduced in 1984 in response to the deteriorating tropical rain forests and mounting debt obligations in Latin America. Since then, many countries have adopted DfCN swaps to address both financial and environmental challenges.
In 2002, the United States (US) engaged in a bilateral swap with Peru, subsidised by NGOs such as The Nature Conservancy (TNC),
to protect over 1 million hectares of wilderness areas. The US has also engaged in similar swaps with Guatemala and Indonesia to protect tropical forests.
In 2015, Seychelles, pioneered a Blue Economy debt for nature swaps, converting USD 21.6 million of sovereign debt with Paris Club creditors to fund marine conservation. This is considered the world’s first debt swap for ocean conservation and climate adaptation.
Belize engaged in a ‘tripartite blue economy swap’ with the TNC in 2021, which reduced its external debt by 10% of GDP. TNC helped Belize to buy back USD 553 million of national debt borrowed from commercial creditors (30% of GDP) by issuing USD 346 million in blue bonds (10% of GDP). In response, Belize agreed to invest in marine conservation. This deal allows buy back of entire external commercial debt by TNC and Belize to invest USD 4 million annually on marine conservation until 2041 aiming to increase marine-protection parks from 15.9% of its oceans to 30% in 2040. Hence, this deal addresses the triple objectives of restoring debt sustainability, promoting sustainable development and enhancing climate resilience.
In 2023, Ecuador entered into the world’s largest DfCN swap, facilitated by Credit Suisse, buying back USD 1.6 billion of sovereign debt for USD 656 million in new sovereign debt. In return, Ecuador agreed to allocate USD 450 million in long-term marine conservation in the Galápagos Islands. The success of this deal was driven by several key factors: participation of academia, collaboration and consensus among multiple stakeholders including civil society and local governments, an innovative financing model, and government leadership.
The effectiveness of swaps depends on the ability to address several key challenges: political and macroeconomic stability to ensure long-term accomplishment; stable institutional structures to denote stability in planning and implementation; strong regulatory frameworks to cover both financial and environmental obligations; and knowledge/skills on swaps at every level of the public service. Accordingly, the success of DfCN swaps is dependent on the leadership role of debtor governments and a systematic approach in the designing and implementation of swaps.
Debt swaps are determined collectively by the respective parties involved, hence, it is difficult to predict the magnitudes of these swaps. However, following the three criteria proposed by Boland (2023) on the magnitude of debt, type of lending (whether it is a commercial or concessional loans) and interest of the creditors (considering the country’s track record), Sri Lanka may consider the following four creditors for a possible DfCN swap in the future (Table 1).
Way Forward
In addressing the triple challenges of high indebtedness, climate change and loss of nature, DfCN swaps can serve as an effective alternative fiscal instrument for debt-ridden Sri Lanka. Systematic planning and stringent government commitment and all relevant key stakeholders are crucial for its success. Also, addressing knowledge and skill gaps on debt swaps is crucial. With sufficient political and macro-stability, Sri Lanka could be ready to implement DfCN swaps potentially accelerating its economic recovery.
Business
Mahindra Ideal Motors celebrates gala ‘Excellence Awards’ honouring outstanding performance and innovation
The Mahindra Ideal Motors Excellence Awards ceremony, a grand celebration to recognize dealers and other stakeholders of Ideal Motors, was held at the Wave n’ Lake Banquet Hall & Restaurant in Welisara recently.
The event was graced by the presence of special guests including Nalin Welgama, Founder and Chairman Ideal Motors, Dilani Yatawaka, Group Managing Director/CEO Ideal Motors, Nimisha Welgama, Director Legal and Corporate Affairs Ideal Motor, Sachin Arolka, Head International Operations, Auto Division Mahindra & Mahindra India. Senthil Selvaraju, Head International Operations and Customer Service Automotive Division Mahindra & Mahindra India, Sujeeth Jayant, Country Head Mahindra & Mahindra India and Shitam Kundu, Head Domestic Services Mahindra & Mahindra India.
Also, in attendance from Ideal Motors were Kasun Fernando, General Manager Commercial Vehicle Sales Division, Sameera Bamunuarachchi, Deputy General Manager Spare Parts, Logistics & Inventory and Prasanna Manamperi, Deputy General Manager After Seles Service.
Speaking at the event, Nalin Welgama Ideal Motors Founder and Chairman said, “When we began our journey with Mahindra in 2009, the previous company had sold 300 vehicles in the country, of which nearly 150 had various defects. At that time our journey began by engaging with the parent company in India and repairing those vehicles free of charge. That commitment has brought us to where we are today. As we believe, our journey truly begins after the sale. We are dedicated to strengthening our customers, and in doing so, strengthening ourselves. That is how we transformed the after-sales service experience.”
He added, “Our main strength is the Mahindra Bolero, which has sold more than 10,000 units in just two years. In a very short period, we grew from zero to over 100,000 vehicles sold. This is not my victory, but the victory of all of you who contributed to it. Despite the challenges of the COVID-19 pandemic and the economic crisis we faced, this awards ceremony was organized to express our gratitude to all of you who trusted our institution and stood by us. Let us continue our victorious journey together.”
Dilani Yatawaka, Group Managing Director Ideal Motors, said: “Today is a very happy day for us. This is the first time in history of the organisation, that representatives of our vehicles, spare parts, services, and financial institutions are meeting together under one roof.”
Speaking on the occasion, Sachin Arolka, Head International Operations, Auto Division Mahindra & Mahindra India, stated that Ideal Motors in Sri Lanka is one of the largest seller of Mahindra vehicles in Asia.
More than 300 dealers and finance partners participated in the event which concluded with dinner, fellowship and entertainment.
Business
Police engagement supports wildlife protection in hill country
Strengthening conservation through active law enforcement
An awareness and capacity-building program on wildlife crime prevention, with a special focus on the Sri Lankan leopard (Panthera pardus kotiya), was successfully conducted on March 20 at the Dimbula Athletics & Cricket Club, Radella.
The session was organized under the ongoing Multi-Regional Leopard Research and Conservation Project implemented by the Wildlife & Nature Protection Society (WNPS), in collaboration with LOLC. It brought together senior officers representing 28 Police stations across the Nuwara Eliya and Kandy districts, underscoring the growing importance of law enforcement in conservation efforts within multi-use landscapes, a WNPS news release said.
The Central Highlands present a unique conservation challenge, where increasing habitat loss and fragmentation, depletion of natural prey, and use of snares continue to threaten leopards inhabiting these landscapes majority outside formally protected areas. The session therefore focused on strengthening the capacity of Police officers to identify, prevent, and respond to wildlife crimes, while fostering closer coordination with conservation stakeholders, it explained.
Co-Chair of the Wildcats Subcommittee, Prof. Enoka Kudavidanage, highlighted the ecological and economic significance of leopards as apex predators, emphasizing their role in maintaining ecosystem balance and supporting nature-based tourism. She also outlined the current conservation challenges in the Hill Country and presented ongoing interventions under the WNPS–LOLC project.
Dr. Sanjaya Weerakody, Postdoctoral Fellow at the Xishuangbanna Tropical Botanical Garden (XTBG), Chinese Academy of Sciences, shared key research findings on leopard mortality trends over the past 17 years revealing concerning patterns, including the disproportionate loss of mature male individuals and the increasing prevalence of snaring as a primary cause of death highlighting an urgent need for targeted enforcement.
Attorney – at – Law Charaka Jayaratne provided an in-depth overview of the legal provisions under the Fauna and Flora Protection Ordinance, with particular attention to offences related to snaring. He discussed how Police can take more proactive and effective action, identifying gaps in current approaches and suggesting practical measures to strengthen enforcement outcomes.
Adding further perspective, Samantha Gunasekara, former Deputy Director of Customs and Chairman of the Marine Environment Protection Authority (MEPA), spoke on the broader context of illegal wildlife trade in Sri Lanka. Drawing from past cases and recent observations, he highlighted emerging trends and risks associated with wildlife trafficking.
Representing the Department of Wildlife Conservation, Ranger Srinath Dissanayake of the Hakgala Wildlife Range shared recent cases on leopard deaths and rescue operations recorded in 2025. He emphasized on personal observations, importance of timely intervention, and strong collaboration between field officers and the Police to mitigate human–wildlife conflict and prevent avoidable losses.
An interactive discussion followed, allowing officers to raise questions, clarify procedures, and exchange experiences while sharing their feedback as well. This dialogue contributed to reinforcing the value of strategic engagement between the Police, the Department of Wildlife Conservation, and conservation partners while strengthening inter-agency understanding and highlighting the need for coordinated responses during leopard-related incidents.
The session commenced with opening remarks by WNPS President Graham Marshall, who expressed appreciation for the participation of the Sri Lanka Police and reiterated the critical role of law enforcement in safeguarding biodiversity beyond protected areas.
WNPS Past President and WNPS LOLC Project Head Spencer Manuelpillai, Project Coordinator Gihani Hettiarachchi, Regional Center Coordinators, Thilanka Dissanayake and Attorney-at-Law Malaka Palliyaguruge were also present as part of the WNPS team.
WNPS extends its sincere appreciation to all officers who participated for their commitment and active engagement. Supported by LOLC, these initiatives form part of a broader effort to strengthen practical conservation through collaboration, knowledge sharing, and effective enforcement in Sri Lanka’s Hill Country.
Business
Mangala Tex marks expansion with new Kurunegala Branch
Fashion retail leader Mangala Tex celebrated the grand opening of its newest branch in Kurunegala on Saturday, March 14, 2026, adding a vibrant new dimension to the city’s commercial landscape.
Since its inception, Mangala Tex has been synonymous with style, durability, and quality, earning a lasting reputation as a premier clothing retailer. Guided by the visionary leadership of Chairman Ronald Nimal Hope, the brand has successfully established a strong presence with thriving outlets in Yatinuwara Veediya, Kandy, Cross Street, Kandy, and Peradeniya, Kandy.
The Kurunegala expansion marks a significant milestone in the company’s growth, bringing its signature fashion offerings closer to a wider customer base. True to its slogan, “Let Your Clothing Do The Talking,” the new store features an extensive range of apparel catering to all age groups, blending contemporary style with durable, high-quality fabrics.
Shoppers at the Kurunegala branch are greeted by a welcoming atmosphere and attentive staff, which long-time customers cite as key reasons for their loyalty. The store’s combination of trendy designs, reliable quality, and customer-centric service continues to set it apart in Sri Lanka’s competitive fashion retail sector.
Mangala Tex now employs more than 120 staff members across its branches, remaining a proudly family-driven enterprise alongside Managing Director Pahan Dissanayaka and Directress M M G P Dissanayaka.
With the official opening in Kurunegala, Mangala Tex demonstrates that consistent quality, style, and service can drive sustained growth, expanding the brand’s reach to new communities while reinforcing its status as a trusted name in Sri Lankan fashion.
Text and Pix by SK Samaranayake
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