Category: Daily Financial Times

Hatton National Bank PLC (HNB) has announced a strategic partnership with Access Motors Ltd., strengthening its position at the forefront of premium mobility financing in Sri Lanka. Effective 25 May, this collaboration introduces an exclusive leasing scheme designed to elevate access to globally renowned Jaguar and Land Rover vehicles, bringing together financial strength and automotive excellence.

The partnership highlights a shared vision to deliver outstanding value to discerning customers while strengthening Sri Lanka’s premium automotive landscape.

With this initiative, HNB aims to set a new benchmark in vehicle financing by combining competitive leasing solutions with enhanced ownership benefits, tailored to meet evolving customer expectations.

HNB Senior Vice President/Head of Retail Banking Kanchana Karunagama said: ‘HNB is pleased to join hands with Access Motors to promote access to high-performance electric and hybrid vehicles. This partnership shows our continuous effort to bring global excellence closer to Sri Lankans, enabling them to access world-class mobility solutions supported by trusted financial expertise.’

Under the scheme, HNB will offer special leasing rates along with a credit card featuring a first year annual fee waiver. Customers will also benefit from attractive discounted vehicle insurance premiums through HNB General Insurance, ensuring comprehensive protection and peace of mind throughout their ownership journey.

Access Motors Ltd., Managing Director Theo Fernando said: ‘We sincerely appreciate HNB for its strong partnership and shared vision in delivering greater value to our customers. This collaboration allows us to further elevate the presence of Jaguar and Land Rover in Sri Lanka, while offering a refined ownership experience that brings together luxury, performance and seamless financial solutions.’

Access Motors will complement these offerings with significant value additions, including vehicle discounts of up to Rs. 500,000. Customers will also receive a complimentary servicing package covering the first five services, inclusive of labour, engine oil, and filters, and excluding wear and tear items. Additional benefits include special discounts on genuine accessories, enhancing both the ownership experience and long-term value.

This partnership underlines HNB’s commitment to innovation and leadership in retail banking while supporting the growth of Sri Lanka’s premium automotive sector.

The Bar Association of Sri Lanka will conduct its first forum in relation to the present discussion on the possible amendment of the Constitution of the Republic to extend the retirement age of Judges including of Supreme Court and the Court of Appeal on Saturday, 4 July 2026.

At this first forum, the position of the Bar Association of Sri Lanka in relation to this presently discussed possible amendment will be presented for public consideration.

Opposition Leader Sajith Premadasa yesterday called for Sri Lanka to adopt a whole-of-government, science-based approach to climate resilience, warning that the country has only a ‘limited window’ to prepare for the anticipated 2026-2027 El Niño cycle, which could trigger prolonged droughts followed by severe flooding.

Addressing the National Council for Disaster Management (NCDM), chaired by President Anura Kumara Dissanayake, he stressed that climate security had become a national priority that transcends political divisions, urging all stakeholders to unite behind a long-term national resilience strategy.

‘When the lives, livelihoods and security of our people are at stake, there should be only one side, and that is Sri Lanka,’ Premadasa said, adding that his proposals were intended to constructively support the Government’s disaster preparedness efforts rather than criticise ongoing initiatives.

Citing global scientific assessments, he warned that the developing 2026-2027 El Niño-Southern Oscillation could rank among the strongest in recent decades, increasing the risk of ‘climate whiplash’, a pattern of prolonged drought followed by severe floods.

He also stressed that Sri Lanka could no longer rely on responding to disasters after they occur and must instead shift towards anticipatory governance driven by scientific forecasting, risk assessments and early preparedness.

Premadasa outlined three key priorities; making anticipatory governance the foundation of national disaster management, treating climate resilience as a whole-of-Government responsibility involving all key Ministries and agencies, and recognising that climate resilience is inseparable from economic resilience, with food, water, energy, public health, infrastructure and fiscal stability requiring an integrated policy response.

Among the measures proposed were strengthening climate preparedness, improving integrated reservoir management and water security, promoting climate-smart agriculture, modernising early warning systems through impact-based forecasting, expanding disaster risk financing, enhancing preparedness for heatwaves and public health emergencies, improving the resilience of critical infrastructure as well as establishing a National Climate Risk and Disaster Intelligence Centre to support evidence-based decision-making.

Premadasa also suggested the preparation of a Presidential White Paper on National Climate Resilience and Disaster Preparedness to provide a long-term policy framework that would outlast successive administrations. Pointing to resilience initiatives in India and Australia, he said Sri Lanka should draw on international best practices, while developing solutions suited to local conditions.

The Opposition Leader reiterated that climate change does not distinguish between governments and oppositions, political parties or communities, calling climate resilience a shared national responsibility that must be guided by science, strengthened through national unity and sustained by long-term strategic planning.

EY Sri Lanka has announced the admission of Sampath Jayawardena to the EY Partnership, recognising his significant contributions to the Firm and the broader profession.

Sampath has been an integral part of the Firm since joining EY Sri Lanka on 22 December 2005. Having served as a Senior Director, he has brought over two decades of experience across Climate Change and Sustainability Services, Assurance, and Strategy and Transactions at EY. His depth of experience and commitment have played a significant role in the Firm’s ongoing success across these sectors.

He is also an active contributor to the profession, particularly within Climate Change and Sustainability Services. His client portfolio includes several leading banks, financial institutions, insurance companies, as well as conglomerates, manufacturing organisations, and other diversified business sectors. Sampath has played a pivotal role in managing key overseas management and maintaining effective liaison with regulators in relation to Climate Change and Sustainability.

Sampath continues to contribute at global, regional and local levels to sustainability, serving on EY’s Global Subject Matter Group on IFRS S1 and S2, the Asia-Pacific Subject Matter Group on ISSB Standards, and the Sustainability Disclosure Standards Committee of CA Sri Lanka, supporting the adoption of IFRS S1, S2 and ISSA 5000. He holds an MBA from the University of Sri Jayewardenepura, an MSc in Climate Change and Environmental Management from the University of Colombo, and the SCR certification from GARP, and is an Associate Member of CA Sri Lanka, ACCA, CIMA and CMA Sri Lanka, as well as a CGMA.

His contributions have been fundamental in strengthening capabilities and enhancing expertise both within the organisation and across the wider professional community in Climate Change and Sustainability Services. Beyond his client work, he has consistently demonstrated a strong commitment to knowledge sharing, actively contributing to internal and external training initiatives in the field of Climate Change and Sustainability.

Scouts, Sri Lanka’s pioneering intelligent drone and robotics company, yesterday said it has closed a funding round at a valuation of Rs. 1.6 billion.

In a market that has historically exported its engineering talent rather than retaining it, the round represents something more than a financing milestone. The company offers an economically viable solution for security, from small farmers to large solar farms.

Scouts provides drone security services, taking responsibility for the installation and management of the entire solution, making the process convenient for end users.

Their pilot-less weather-resistant drones use artificial intelligence and machine learning for perimeter security, navigating and detecting security breaches while patrolling continuously across plantations, warehouses, and solar farms, significantly increasing the availability of security and monitoring at a fraction of the cost.

SITREK Group, which has operated at the top of Sri Lanka’s security sector for more than four decades, is among the investors – showcasing a promising relationship between a long-standing institution and a fresh, new company, a partnership that is the kind of signal that tends to move the drone intelligence systems market.

What Scouts has built is a complete system: the hardware, the software, and the intelligence that differentiates this solution. Its drones do not simply record; they identify, they alert, and they record evidence of incidents like fires, intruders, open gates etc. until a response arrives.

For clients managing large or complex sites, it extends the reach of their security operations in ways that additional headcount alone cannot replicate while turning the existing cameras and motion detectors into active triggers for the drone-based system.

Beyond security applications from plantations and warehouses to energy infrastructure and industrial facility monitoring, Scouts is working on precision agriculture drones for crop health monitoring and detecting early-stage diseases, giving farms and plantations an early warning system that can aid in targeted interventions to mitigate crop loss and damages that would otherwise go undetected.

On wind and solar installations, thermal imaging drone inspection and structural surveys locate faults in hours as opposed to days that a manual inspection requires. Scouts describes the underlying robotics framework as one designed from the outset to accommodate new form factors and new sectors, each sharing the same requirement for mobile, intelligent observation.

The recent volatile weather conditions and environmental disasters in the region brought the limitations of ground-based emergency response into focus. Scouts is developing the protocols to deploy its platform in emergency conditions – locating trapped civilians using thermal imaging, rapid deployment, air drops, live relay to teams on the ground – treating emergency response as a direct extension of what its systems already do in commercial operation. The company is also extending its platform into environmental conservation, with an established partnership with the Centre for Conservation and Research and other grass root community organisations.

Co-Founder and CEO Kalana Muthumuni said: ‘We are at a pivotal moment in our history. Software and Hardware based automation are taking over the world at a rapid pace. Scouts aims to utilise these advancements of technology for the good of the world’.

The Global Startup Ecosystem Report 2025 placed Sri Lanka in the top five globally for technical talent and recorded $ 821 million in ecosystem value between 2022 and 2024. For years, much of that talent has gone abroad – to technology centres in Europe, Singapore, the Gulf, and beyond, but Startups like Scouts inspire talent to come back. Scouts has engaged in a partnership with the University of Moratuwa to establish a bridge between Sri Lankan experts working on global cutting edge solutions, directly to the university and its students.

Scouts is invested by SITREK Security Solutions Ltd., the country’s largest security provider, Janashakthi Group Deputy CEO Dilshan Wirasekara, also CEO of First Capital and former Chairman of the Colombo Stock Exchange, and Dart Global Group Managing Director Jude Nashitha.

Sri Lanka’s economic crisis exposed a critical weakness that continues to threaten the country’s stability: our heavy dependence on imported fuel.

Fuel quotas, import restrictions, and price increases may provide temporary relief during periods of shortage, but as long as millions of Sri Lankans rely on fuel-powered vehicles for their daily travel, the country will remain vulnerable to fuel shortages, foreign exchange pressures, and global energy shocks.

Sri Lanka spends billions of dollars each year importing fuel. In 2025 alone, fuel imports cost the country approximately $ 3.8 billon. At the same time, around 93% of land transport in Sri Lanka depends on roads, making the economy heavily reliant on petroleum-based transport.

Yet one of the most promising long-term solutions was already planned.

The Colombo Light Rail Transit (LRT) project was designed to make public transport efficient in the Western Province while reducing dependence on imported fuel. Backed by highly concessional Japanese financing and supported by years of planning and technical studies, the project had the potential to address several of Sri Lanka’s most pressing challenges. However, despite its strategic value, the project was cancelled before construction began.

The LRT should not be viewed simply as a transport project. It should be recognised as a strategic investment in energy security, economic resilience, and sustainable development.

The fuel crisis is also a transport crisis

A significant share of Sri Lanka’s fuel consumption comes from the transport sector. Every day, thousands of cars, motorcycles, vans, and buses enter Colombo, creating severe congestion and consuming large quantities of imported fuel.

Traffic congestion does more than inconvenience commuters. It wastes fuel, reduces productivity, increases pollution, and places a growing burden on the economy. Vehicles spend countless hours stuck in traffic, burning fuel while generating little economic value.

The events of 2022 demonstrated the risks of this dependence. Fuel shortages disrupted businesses, affected healthcare services, interrupted livelihoods, and created uncertainty across the country.

If Sri Lanka wants to reduce its vulnerability to fuel crises, it must provide people with a reliable alternative to private vehicle use.

Why the LRT matters

The proposed system would have operated primarily on electricity rather than imported petroleum products. This is where the LRT becomes more than a transport project.

Every commuter who shifts from a private vehicle or fuel-powered bus to an electric rail system reduces the country’s demand for imported fuel. When that shift occurs across thousands of daily journeys, the national impact becomes substantial.

The benefits are clear:

Lower fuel imports

Reduced pressure on foreign exchange reserves

Less traffic congestion

Higher productivity through shorter travel times

Lower carbon emissions

Greater protection against future fuel supply disruptions

In short, the LRT offers a practical solution to several national challenges through a single long-term investment.

The LRT was never just one rail line

Public discussion about the LRT often focuses on the proposed Malabe-Fort line. However, this was only the first stage of a much larger plan.

The project was intended to become the backbone of a modern public transport network across the Colombo Metropolitan Region. Future phases were expected to connect major residential areas, business districts, educational institutions, and transport hubs throughout the Western Province.

This broader vision is important because the Western Province contributes more than 40% of Sri Lanka’s GDP and serves as the country’s primary economic centre. Improving mobility within the region is therefore not simply a transport objective-it is an economic priority.

The cancellation of the LRT halted more than a single rail line. It halted the foundation of a long-term transport strategy designed to support the future growth and competitiveness of Sri Lanka’s most economically important region.

For example, studies indicated that the journey between Malabe and Colombo Fort could be completed in approximately 30 minutes, with trains operating at frequent intervals during peak periods. This would have provided commuters with a practical and reliable alternative to road travel.

A costly missed opportunity

The original project was supported by one of the most favourable financing arrangements ever offered for a major transport infrastructure project in Sri Lanka. Reports indicate that the Japanese loan carried an interest rate of approximately 0.1%, with a repayment period of 40 years and a grace period of 12 years.

Such financing is exceptionally rare. By cancelling the project, Sri Lanka not only lost the opportunity to build a modern public transport system but also incurred significant costs related to project termination and abandoned prep work. More importantly, the country lost valuable time. Years later, Sri Lanka continues to face many of the same challenges that the LRT was intended to address.

How the Government can move forward

Reviving the LRT does not mean starting from scratch. Much of the groundwork has already been completed, including feasibility studies, environmental assessments, route planning, and technical designs. The foundation already exists. The Government should consider the following steps:

Re-engage Japan and JICA: Japan has long been one of Sri Lanka’s most reliable development partners. Reopening discussions with JICA and the Japanese Government could help rebuild confidence and explore opportunities to revive the project and its financing arrangements.

Recognise the LRT as an energy security investment: The LRT should not be viewed solely as a transport project. It is also an investment in reducing fuel imports, strengthening energy security, and improving economic resilience. Reducing dependence on imported fuel is just as important as increasing export earnings.

Build an integrated public transport system: The success of the LRT depends on how well it connects with other forms of transport. Bus services, existing railway networks, and park-and-ride facilities should be integrated into a single system that makes public transport convenient and accessible.

Align the project with renewable energy goals: As Sri Lanka expands solar, wind, and other renewable energy sources, an electric rail system can increasingly operate using locally generated energy. This would further reduce dependence on imported fuel while strengthening national energy security.

Looking beyond the next crisis

The question is not whether Sri Lanka will face future fuel and energy challenges. Global energy markets remain uncertain, and fuel prices will continue to fluctuate.

The real question is whether Sri Lanka will continue relying on a transport system that increases fuel dependence, or invest in infrastructure that reduces it. The LRT offers an opportunity to address multiple national challenges at once: fuel dependence, traffic congestion, urban pollution, productivity losses, and long-term economic competitiveness. Reviving the project would demonstrate a commitment to long-term planning rather than short-term crisis management. Sri Lanka spends billions of dollars importing fuel every year, yet one of the country’s most important fuel-saving infrastructure projects remains unfinished.

The fuel crisis showed us the cost of dependence. The LRT offers a path toward resilience.

Sri Lanka should not wait for the next fuel crisis to recognise its value.

The Colombo stock market opened the week deep in red amid renewed concerns over flaring tensions in the Middle East.

With 160 counters closing in red against 71 in green, the ASPI ended down 0.65% or 146.53 points at 22,263.28 and the S and P SL20 lost 0.56% or 34.92 points to 6,212.50.

Market turnover was over Rs. 1.7 billion on nearly 60 million shares traded. Foreign investors were net sellers on a net outflow of Rs, 466.1 million.

First Capital Research said investor sentiment weakened amid renewed geopolitical uncertainty, which triggered selling pressure across selected counters. HNW and retail participation remained at average levels.

The main negative contributors to the ASPI were DIAL, JKH, WIND, CIC, and HAYL. The utilities sector led the daily turnover with a share of 28%, followed by the capital goods, and retailing sectors collectively contributing 28%.

CT Smith Securities said Windforce emerged as the top contributor to turnover with Rs. 470 million, followed by Colombo Dockyard with Rs. 172 million, and Sathosa Motors with Rs. 107 million.

NDB Securities said high-net-worth and institutional investor participation was noted in Colombo Dockyard, Sathosa Motors and Galadari Hotels. Mixed interest was observed in Windforce, HNB Finance and CIC Holdings, whilst retail interest was noted in LOLC Finance, Browns Investments and UB Finance Company.

The utilities sector was the top contributor to market turnover due to Windforce, whilst the sector index lost 2.39%. The share price of Windforce decreased by Rs. 2.20 to close at Rs. 40.80.

The capital goods sector was the second-highest contributor to market turnover due to Colombo Dockyard, whilst the sector index decreased by 0.52%. The share price of Colombo Dockyard lost 25 cents to end at Rs. 130.

Sathosa Motors, Distilleries and HNB Finance were also among the top turnover contributors. The share price of Sathosa Motors edged up 75 cents to Rs. 1,200.50, Distilleries gained 50 cents to Rs. 57.50, and HNB Finance closed flat at Rs. 9.60.

The International Monetary Fund (IMF) yesterday clarified that Sri Lanka’s temporary tightening of vehicle import financing requirements did not derail its Extended Fund Facility (EFF) program, as the Central Bank reported motor vehicle imports had exceeded $ 1 billion during the first five months of 2026.

Speaking at a media briefing, IMF Mission Chief for Sri Lanka Evan Papageorgiou said the temporary measure triggered one of the program’s continuous performance criteria on import restrictions after it tightened import financing requirements for vehicles.

The IMF’s clarification came as the Central Bank yesterday reported that expenditure on motor vehicle imports, including personal and commercial vehicles, rose 20% month-on-month to $ 250 million in May, bringing cumulative spending on vehicle imports to $ 1.071 billion during January to May 2026.

He said the issue was discussed with the authorities and subsequently presented to the IMF Executive Board during the combined Fifth and Sixth Review of the EFF arrangement. The authorities had explained that the measure was temporary, introduced to contain the sharp increase in vehicle imports following the reopening of imports, and would be reversed within the announced timeframe.

‘The Board was convinced that this was meant to be temporary,’ Papageorgiou said, adding that the authorities had also outlined corrective actions to address the deviation. He said the temporary nature of the measure and the planned corrective action were taken into account by the Executive Board in assessing program performance.

Effective 25 May, the Central Bank reduced the maximum loan-to-value (LTV) ratios on motor cars, SUVs, vans and three-wheelers to 40% from 50%, while the ceiling for commercial vehicles was lowered to 60% from 70%, requiring buyers to make larger upfront cash contributions.

The Government also imposed a temporary 50% surcharge on the existing 30% Customs Import Duty on imported vehicles, raising acquisition costs through higher duties and their cascading effect on other import-related taxes.

Sri Lanka Customs yesterday said the alleged nearly $ 1 billion transferred overseas since 2023 through advance-payment transactions without corresponding imports fell outside its operational mandate, indicating that such transactions would instead have been visible to the banking system and the Central Bank’s Financial Intelligence Unit (FIU).

Responding to questions on the alleged ‘phantom imports’ disclosed by President Anura Kumara Dissanayake in Parliament last week, Customs Assistant Superintendent Chandana Punchihewa said the department only becomes involved once goods physically arrive in Sri Lanka.

‘Customs was not aware of such transactions. We only get involved once goods arrive within our borders,’ he said.

Punchihewa said advance payments for imports could previously be remitted overseas against proforma invoices before goods were shipped, with the relevant commercial banks processing those transactions.

He said the Financial Intelligence Unit of the Central Bank of Sri Lanka and the banks involved would have records of such remittances.

Punchihewa noted that the regulatory gap has since been addressed, with advance payments now restricted to importers registered with Sri Lanka Customs, strengthening oversight of import-related foreign exchange transactions.

Asked whether a similar mechanism could facilitate under-invoicing and illicit capital outflows, Punchihewa said such practices were possible, but added that they would not, by themselves, account for the scale of the alleged outflows disclosed by the President.

Addressing Parliament last week, President Dissanayake alleged that nearly $ 1 billion had been transferred overseas through advance-payment transactions since 2023 without the corresponding importation of goods, describing the transactions as part of a wider network of financial crime.

Separately, MP Ravi Karunanayake has alleged that the suspected outflows were processed through 13 commercial banks and involved 105 shell companies. He has called on the Committee on Public Finance (CoPF) to summon CBSL and banking officials and investigate the matter.

The International Monetary Fund (IMF) yesterday said Sri Lanka’s swift response to the economic fallout from the Middle East conflict had preserved macroeconomic and social stability, while urging the Government to pursue ‘bold reforms’ as it prepares for the Seventh Review of its Extended Fund Facility (EFF) arrangement.

The Fund said stronger, more durable and inclusive growth would require ‘bold reforms’ to improve the efficiency and fairness of the tax system, liberalise trade, address labour market rigidities and enhance the business environment to attract investment, create jobs and reduce poverty.

In a statement issued at the conclusion of a week-long staff visit to Colombo, the IMF said gains under Sri Lanka’s reform program had created the policy space to respond to the external shock, while reiterating the need to restore fiscal discipline, strengthen debt management and maintain prudent monetary and exchange rate policies.

An IMF team led by Evan Papageorgiou visited Colombo from 24 to 30 June to review recent macroeconomic developments and progress under the EFF-supported reform program.

At the conclusion of the visit, Papageorgiou issued the following statement:

‘The Middle East war has weighed on Sri Lanka’s economy. Headline inflation rose from 1.6% YoY in February 2026 to 5.5% YoY in May following energy price increases. Tourist arrivals growth softened and gross international reserves accumulation decelerated.

‘The Central Bank of Sri Lanka responded with a 100-basis point policy rate hike and deployed macroprudential measures. The Government rolled out a temporary, on-budget, relief package comprising fuel, electricity, and fertiliser subsidies, as well as cash transfers to the most vulnerable households. While uncertainty remains high, the recent decline in global commodity prices offers some relief from external pressures.

‘Staying the course on the reform agenda remains critical to solidify Sri Lanka’s recovery and to preserve fiscal and external sustainability.

‘Following fiscal easing in 2026, the authorities are committed to reverting to the primary balance target of 2.3% of GDP in 2027 to safeguard macroeconomic stability. Efforts to improve tax compliance, broaden the tax base, and enhance public financial management, including by preventing the re-emergence of expenditure arrears, should continue.

‘Resolving bottlenecks to spending execution-including disaster-related support-is imperative for effective post-cyclone recovery and reconstruction.

‘Accelerating the reform of state-owned enterprises and maintaining cost-recovery energy pricing are key to minimising fiscal risks. At the same time, the authorities should prioritise adequate targeting and coverage of social safety nets to protect vulnerable families.

‘While debt restructuring is nearing completion, progress toward building capacity of the Public Debt Management Office needs to accelerate to promote prudent debt management practices, deepen domestic debt markets, and support Sri Lanka’s eventual return to international capital markets.

‘Monetary policy should remain prudent, agile, and data-dependent to safeguard price stability under heightened global uncertainty.

‘Exchange rate flexibility is paramount to support external adjustment in the face of shocks without undermining reserve accumulation, with foreign exchange intervention limited to addressing excessive volatility. Balance of payments restrictions should be phased out. Strengthening operational risk, cybersecurity, and AML/CFT safeguards are essential for preserving financial stability.

‘Building resilience to shocks and achieving strong, durable, and inclusive growth requires steadfast implementation of governance reforms. It also requires bold reforms to improve the efficiency and fairness of the tax system, liberalise trade, address labour market rigidities, and enhance the business environment to attract investment, create jobs, and bring poverty rates down.

‘Sri Lanka’s program performance will be formally assessed in the context of the Seventh Review of the EFF. The dates of the mission will be announced in due time.

‘The mission held meetings with President and Finance Minister Anura Kumara Dissanayake, Prime Minister Dr. Harini Amarasuriya, Labour Minister and Deputy Finance and Planning Minister Prof. Anil Jayantha Fernando, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe, Treasury Secretary Dr. Harshana Suriyapperuma, Senior Economic Adviser to the President Duminda Hulangamuwa, Chief Adviser to the President on Digital Economy Dr. Hans Wijayasuriya, and other senior Government and CBSL officials. The mission also met with representatives from the private sector, civil society organisations and development partners. We would like to thank the authorities for the excellent engagement during the visit,’ Papageorgiou said.