NDF - Financing for climate change and development projects

NCF 7: Innovative climate decision-support tools for enhancing SME resilience in Sri Lanka

Photo: UNEP DTU Partnership
Photo: UNEP DTU Partnership
Photo: UNEP DTU Partnership
The project aims to develop innovative and sustainable approaches and tools to build businesses' adaptation capacity in the garment sector in Sri Lanka, to reduce recurring losses from floods.

Sri Lanka
Innovative climate decision-support tools for enhancing SME resilience in Sri Lanka
Ref: NDF C96

Nordic Partner: UNEP DTU Partnership
Local Partner: Asian Disaster Preparedness Centre
Other Local Partners: The Ceylon Chamber of Commerce.
Other Partner: MP Ensystems Advisory Private Ltd.
Total Project Cost: EUR  649,892 
NCF Financing: EUR  499,982
Agreement Signed: 21 September 2018
Project type: Adaptation
Duration: 24 months


Among the most adversely affected by recurrent floods in Sri Lanka are small and medium-sized enterprises (SMEs) in the garment industry, where a large percentage of women are employed. These businesses suffer from extensive flood related losses and damages and have poor adaptive capacity; they are typically not covered by a private insurance and municipal services to help them prevent and recover from floods. Direct and indirect losses to businesses, have cascading impacts on the economy and society. Although, financially and technically feasible solutions exist, businesses are in general unaware of the potential adaptation measures. Building their capacity to deal with climate risks is therefore essential to 'climate proof' their business operations and build long-term societal resilience.

UNEP DTU Partnership (UDP), Asian Disaster Preparedness Center (ADPC), the Ceylon Chamber of Commerce (CCC) and MPEnsystems Advisory Pvt. Ltd., have created a consortium, with the objective of developing a disaster risk management and business continuity tools targeted at vulnerable SMEs in the garment industry. The tools aim to empower SMEs with the agency to make their own decisions to mainstream adaptation practices and thereby enhance their resilience towards climate change. This will allow them to reduce recurring losses from floods, while formulating measures to continue business operation during disruptive events and adapt to climate change in the long-term. The tools, which will consider various appropriate adaptation actions, will allow SMEs to systematically deal with climate risks in a manner, which is cost-effective and adapted to their specific context and will later have the potential to be replicated and scaled across other sectors and countries.

Expected key results
  • A baseline study will provide improved understanding of SMEs' vulnerability context in Sri Lanka and current risk behaviour.
  • Innovative decision tool will support increased awareness and behavioural change amongst targeted SMEs, in relation to (i) assessing climate risks (ii) mechanisms to integrate and invest in DRM and adaptation planning (iii) financial models to support adaptation investments and operation and management.
  • Multi-stakeholder dialogue between key organisations that support SMEs in Sri Lanka at the local, national and regional levels will be created.