Revitalizing Payment for Ecosystem Services (PES) in Sri Lanka: Building Capacity for the Future

A four-day capacity-building workshop on Payment for Ecosystem Services (PES) brought together government, private sector, and civil society stakeholders in Kandy from 19–22 August 2025 to strengthen Sri Lanka’s path toward sustainable biodiversity finance.

In a country like Sri Lanka, where the state ensures free access to essential services such as education and healthcare, natural resources have long been perceived as gifts of nature—public goods to be used freely—making it difficult for people to accept the idea of paying to conserve biodiversity. However, this outlook has proven unsustainable. As resource use began to outpace natural replenishment, and human activities such as land-use changes further weakened ecosystems, the urgent need for innovative approaches to biodiversity management became clear.

One such approach is Payment for Ecosystem Services (PES), an innovative mechanism that promotes conservation by providing direct financial rewards for the sustainable use and protection of biodiversity. Instead of potentially harmful development actions. Recognizing its potential, Sri Lanka piloted its first PES scheme in 2019 under the UNDP’s Biodiversity Finance Initiative (BIOFIN), partnering with a mini-hydro operator. That same year, BIOFIN supported a capacity-building programme featuring international experts, which laid the groundwork for PES to be recognized as a viable tool for biodiversity financing.

The years that followed brought unprecedented crises, but as Sri Lanka’s economy gradually stabilized, interest in innovative financing solutions for nature has grown stronger. Government agencies, private sector stakeholders, and civil society organizations alike are turning to PES as a practical and forward-looking mechanism that takes a business approach. The Ministry of Environment has shown interest in assessing whether Sri Lanka’s existing institutional and policy frameworks are adequate to support PES, or whether new policies are needed to unlock its full potential. At the same time, private sector actors are eager to explore how PES can help strengthen their sustainability credentials, while civil society groups emphasize the importance of safeguarding against greenwashing.

To strengthen national capacity, the BIOFIN project organized a four-day training programme titled “Revitalizing PES in Sri Lanka: Pathways to Progress”, held in Kandy from 19 to 22 August 2025. The programme brought together 37 participants from across government, business, and civil society. Alongside in-depth training on PES design elements, participants visited a potential PES field site to explore the real-world challenges of bridging theory and practice. The training was made possible through the generous support of the Green Finance Institute (GFI), whose partnership enabled BIOFIN to deliver an engaging and practical learning experience.

The workshop featured a series of technical sessions delivered by both national and international experts, providing participants with a comprehensive overview of PES, from theory to practice. Professor Sirimal Abeyratne, Professor Emeritus at the University of Colombo, opened the programme with a session on the context and opportunities for PES as a biodiversity finance solution in Sri Lanka. This was followed by Dr. Kanittha Tambunlertchai, Professor at Chulalongkorn University, Thailand, who introduced the key concepts of PES and later guided participants through the essential aspects of scheme design.

Photo: Professor Emeritus at the University of Colombo and Executive Director of the Centre for Poverty Analysis (CEPA)

Building on this, Dr. Andrew Seidl, Senior Technical Advisor at UNDP BIOFIN, presented global and regional PES examples and highlighted what models could be adapted for Sri Lanka. The national perspective was further strengthened by Ramitha Wijethunga, National Project Coordinator of UNDP BIOFIN Sri Lanka, who introduced the country’s ecosystem services risk map and discussed its implications for PES opportunities. The sessions concluded with an exploration of policy and institutional features of PES in other countries, giving participants comparative insights into how frameworks elsewhere could inform Sri Lanka’s path forward.

Photo: Dr. Andrew Seidl, Senior Technical Advisor, UNDP BIOFIN

The results of the training were promising: 84% of participants reported that the training significantly enhanced their knowledge of PES as a biodiversity financing tool, and many expressed strong satisfaction with the programme. As Mandakini Amarasinghe, Environmental Officer at the Central Environmental Authority, reflected:

“The PES workshop deepened my understanding of how conservation efforts can be integrated to create true win–win outcomes—benefiting both communities and ecosystems. It offered valuable insights into promoting conservation more sustainably and practically.”

Sharing their insights, Dr. Kanittha Tambunlertchai, Professor, Chulalongkorn University

Thailand, one of the technical experts who delivered the sessions, also highlighted:

“The training emphasizes Sri Lanka’s growing interest and commitment to biodiversity finance, and especially for the Payment for Ecosystem Services (PES) mechanism. Participants came from diverse backgrounds—government, business, academia, and nonprofits—and all actively engaged in discussions and activities. A site visit to a tea plantation where PES is being considered enriched the learning process by highlighting and sparking discussions on both the opportunities and challenges of PES.”

Photo: Dr. Kanittha Tambunlertchai, Professor, Chulalongkorn University, Thailand

A highlight of the workshop was the field visit to Talawakelle, where participants explored the potential for PES in the tea sector. The visit provided first-hand exposure to the opportunities and challenges of linking conservation with livelihoods. Discussions centered on how tea plantations could benefit from PES arrangements, particularly in areas such as watershed management, soil conservation, and eco-certification.

Outcomes and Way Forward

Participants identified a range of PES applications that could be adapted to Sri Lanka’s context, including watershed management, eco-tourism, and biodiversity offsets. The workshop also recommended strengthening the existing policy working group on PES, tasked with reviewing existing frameworks and developing clear guidelines to scale up implementation nationally. This working group is expected to bring together government institutions, private sector actors, and civil society to ensure that PES schemes are both practical and inclusive.

By equipping stakeholders with the operational know-how to design, monitor, and implement PES initiatives, Sri Lanka is taking a vital step toward ensuring that nature’s true value is recognized, protected, and sustained for generations to come.

Written by Sayumi Jayawardene, Project Assistant, BIOFIN Sri Lanka, and Ramitha Wijethunga, National Project Coordinator, BIOFIN Sri Lanka