Sri Lanka’s circular agrifood transition: a partnership approach to unlocking private sector action
05/05/2026 – Sri Lanka
Turning waste into opportunity
Sri Lanka is positioning itself as a regional hub for circular agrifood innovation and investment opportunities. Faced with rising food waste and post-harvest losses, the country is transforming environmental challenges into opportunities for investment, innovation, and sustainable growth through partnerships that connect government, industry, small, and medium-sized enterprises (SMEs) and development actors. Sri Lanka generates an estimated 3,963 tonnes of urban food waste daily (FAO/IWMI, 2021). At the same time, significant post-harvest and distribution losses across key value chains, including fruits and vegetables, fisheries, rice, and livestock, continue to result in substantial economic and environmental costs. In the fruits and vegetables sector alone, annual losses are estimated at approximately Rs. 180 billion (Department of Agriculture, Sri Lanka, 2025).
Sri Lanka’s Nationally Determined Contributions (NDCs) 3.0 prioritizes reducing food waste, bio-waste emissions, and plastic pollution as part of the country’s climate mitigation and adaptation commitments. The convergence of food system resilience, climate goals, and material innovation is opening new avenues for collaboration among investors, enterprises, and development partners, including:
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Technology partnerships for food processing, biopolymers for packaging, and market expansion at both national and international levels;
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Joint ventures in biodegradable and compostable materials, as well as cold-chain and processing logistics;
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Cross-border trade in circular goods and know-how, linking European Union (EU) and Sri Lankan markets.
Supporting Sri Lanka’s circular transition through partnerships
Through the European Union (EU) Global Gateway-funded Circular Economy in the Food Sector (CIRCULAR) project (2024-2027), FAO is fostering public-private partnerships to support Sri Lanka’s transition towards a circular agrifood economy. The project strengthens the capacities of agrifood enterprises, particularly small and medium-sized enterprises (SMEs), to adopt circular practices and scale sustainable business models through coordinated technical support, capacity development, and investment facilitation. By strengthening business capabilities and the enabling environment, CIRCULAR provides a practical pathway for companies to unlock new value streams and build competitive, resource-efficient solutions across Sri Lanka’s agrifood system and beyond.
Partnership with the Sri Lanka Food Processors Association
A central component of this engagement is FAO’s collaboration with the Sri Lanka Food Processors Association (SLFPA). The partnership focuses on improving efficiency and reducing food waste within the hospitality sector (HoReCa), where operational practices directly influence food loss and consumer outcomes. Through targeted training programmes, food handlers and businesses are equipped with practical tools for food waste prevention, safe handling, and resource optimization, implemented in collaboration with the Ministry of Environment and Ministry of Health. The initiative also strengthens food safety practices, contributing to improved economic performance, public health outcomes, and environmental sustainability.
Scaling innovation through Good Market
In parallel, FAO is working with Good Market, a platform connecting actors across the food value chain, to implement CIRCULAR Living Labs that support scaling circular solutions with SMEs. These Living Labs serve as platforms for innovation and collaboration, enabling enterprises to scale solutions such as waste-to-feed systems, alternative packaging, and waste-to-energy applications, value addition and product development. By facilitating business-to-business (B2B) connections and investor matchmaking, the initiative bridges innovation and commercialization, one of the key barriers to scaling circular solutions in Sri Lanka.
Building a circular economy ecosystem
The project advances collaboration through capacity development, technical cooperation, knowledge exchange, policy dialogue, and investor capacity development and mobilization, reflecting a structured approach to building a functional circular economy ecosystem. These partnerships operate across key thematic areas aligned with FAO’s mandate on production, environment, and improved livelihoods, while contributing directly to the implementation of the Sustainable Development Goals (SDGs), particularly SDG 12.3: Halving Food Waste and Reducing Food Losses, SDG 11: Sustainable Cities and Communities, SDG 17: Partnerships for the Goals.
Where the private sector can engage
Multiple entry points are emerging for private sector actors. Technology providers can deliver solutions for processing, storage, and traceability, and bio-based, biodegradable or reusable materials for agrifood packaging. Financial institutions can also develop tailored instruments to support circular investments, building on emerging evidence generated through the project, including co-created circular business models that strengthen competitiveness for both domestic and international markets.
As Sri Lanka advances its circular economy transition, this partnership approach is closely aligned with the FAO Strategy for Private Sector Engagement (2026-2030), which promotes innovative and dynamic models to engage with the private sector in support of agrifood systems transformation.
