๐ Tender Overview
Project Name
Skills Development System Transformation Program
Project Number
42251-020
Country / Economy
Sri Lanka
Project Status
Proposed
Project Type / Modality of Assistance
Loan
Source of Funding / Amount
Loan: Skills Development System Transformation Program
Concessional ordinary capital resources lending US$ 100.00 million
Sector / Subsector
Education / Secondary - Technical and vocational education and training
Gender
Effective gender mainstreaming
Description
The program will support a subset of the National Education Policy Framework (NEPF) 20232033 for technical and vocational education and training (TVET) from 2024 to 2029. It aims to increase youth and adults, especially from socioeconomically disadvantaged backgrounds, including women and people with disabilities, with qualifications and skills required for jobs, through TVET system reforms intended to create diversify pathways between general school education, higher education, and TVET; increase the provision of employment-oriented and quality-assured TVET, including those related to green and emerging occupations and technologies; and enhance industry and employer engagement and private sector participation in governance and delivery mechanisms for TVET. The program will introduce digital platforms and tools to enhance efficiency and effectiveness in TVET management and delivery.
Project Rationale and Linkage to Country/Regional Strategy
Since 2022, Sri Lanka has been confronted with unparalleled economic crisis. The poverty rate, based on a poverty line of $3.65/day, increased from 11.3% in 2019 to 25.0% in 2022. Compared to the pre-pandemic average of about 200,000 persons, the number of people who left the country for secured jobs overseas jumped to about 300,000 in 20222023. The youth (aged 1524) unemployment rate remained high at 22.8% in 2022, whereas the overall labor force participation rate stood low at 49.8% (70.5% for men and 32.1% for women). While the economy started to show some signs of stabilization in late 2023 after the 48-month Extended Fund Facility was agreed with the International Monetary Fund, this was achieved partly by tax policy and public expenditure rationalization measures which have affected the technical and vocational education and training (TVET) sector. Moreover, Sri Lanka's efforts towards inclusive economic recovery are now constrained by severe shortages of skilled workforce in key sectors of the economy due to outmigration (e.g., tourism, health care, construction) and weak enabling environment for enhanced private sector participation (PSP).
In this macroeconomic context, the government has been preparing reform programs across various sectors, including education. The National Education Policy Framework (NEPF) 20232033, approved by the Cabinet in October 2023, sets out key policy directives to transform education (early childhood education, general school education, tertiary education covering higher education and T
