The initiative is expected to significantly boost water service delivery in Galle, increase billable water, and improve revenue generation. By reducing physical water losses, the project also contributes to better conservation of water resources.
In a landmark move to modernize its water sector, Sri Lanka is set to launch its first public-private partnership (PPP) for water supply, with the aim of drastically reducing water losses across the system. The initiative will be backed by technical assistance from the Asian Development Bank (ADB).
The National Water Supply and Drainage Board (NWSDB), in collaboration with the Ministry of Urban Development, Construction, and Housing, will pilot the project in the southern city of Galle. The effort will focus on tackling the long-standing issue of non-revenue water — treated water that is lost before reaching consumers due to leaks, theft, or inaccurate metering.
“High levels of non-revenue water remain a serious challenge to water utilities across Asia and the Pacific,” said Takafumi Kadono, ADB Country Director for Sri Lanka. “This project represents a pioneering step for Sri Lanka in using PPPs to strengthen the efficiency, resilience, and sustainability of its water sector. ADB is proud to bring international expertise to support the government through project preparation, competitive tendering, and financial close.”
Performance-based Payment Model
Under the proposed PPP, a private partner will be responsible for financing, implementing, and maintaining critical infrastructure upgrades. These include pipe replacements, installation of pressure-reducing valves, and modernization of metering systems.
What sets this project apart is its performance-based payment model. The private partner will be compensated based on measurable reductions in water loss — a mechanism designed to incentivize high performance and ensure long-term sustainability.
The initiative is expected to significantly boost water service delivery in Galle, increase billable water, and improve revenue generation. By reducing physical water losses, the project also contributes to better conservation of water resources, a vital step in building climate-resilient urban infrastructure.
The pilot in Galle is seen as a potential blueprint for nationwide replication, with implications for addressing water inefficiencies throughout Sri Lanka. If successful, it could also serve as a model for other countries in the region facing similar challenges.
With international backing and private sector engagement, Sri Lanka’s foray into water sector PPPs marks a strategic shift toward smarter and more accountable public service delivery.
