The context of US-AEP�s engagement is economic as well as environmental, harnessing the broad-based desire in Asia for accelerated but cleaner economic growth to drive a "clean revolution" of sustainable development. US-AEP�s approach is to pursue sustainable change in the way Asia proceeds with its industrial and urban growth through a development assistance approach founded in two basic premises:

1. To form a nexus between sustainable development and trade, particularly with the United States, to the mutual benefit of each; and
2. To create and promote lasting partnerships, locally, regionally and internationally, that will carry on beyond the reach and longevity of development agencies.

US-AEP�s approach to fostering a transformation to clean growth is to engage key decision makers in the public and private sectors, and harness those forces which serve as incentives for change: market, political, corporate, regulatory, and public advocacy. Ultimately, the future of the environment in Asia will be determined by these key Asian decision makers, including individuals, institutions, and the general public.

US-AEP targets four main areas related to the interdependent goals of environmental quality and economic growth:

• public policy and environmental regulation;
• urban environmental management;
• corporate governance and environmental management; and
• the transfer of U.S. environmental technology, expertise and practices through trade and investment.

Woven throughout these four areas is an emphasis on energy and resource efficiency and other measures which reduce greenhouse gas emissions and thereby mitigate the impact of developing Asia on global climate change.

In order to leverage resources from outside the U.S. government and to create self-sustaining partnerships that will outlive development assistance, US-AEP enlists the expertise and commitment of U.S. and Asian stakeholders: professional associations, large multinational corporations, small-to medium-sized U.S. private sector firms, U.S. states, and Asian and American municipalities and non-governmental organizations. Through the partnership of USAID and the Department of Commerce, Asia�s environmental quality and economic growth are mutually advanced by connecting Asia�s decision makers with the best in American environmental technology and expertise.

US-AEP�s engagement with a wide variety of partners serves another key component of the US-AEP vision: supporting U.S. foreign policy interests and fostering improved international relations in many sectors of American society. By facilitating the active participation of the business community and public sector at state and municipal levels, US-AEP makes development assistance relevant to Americans not directly connected with international relations.

Increasing income level, improving quality of life, and increasing sensitivity towards environment have increased the demand for cleaner technologies. The high cost of energy sources, health costs associated with poor environmental quality and demand by the export market for greener products require better environmental management and efficient methods/equipment. Increased public investment in infrastructure and multilateral programs will increase the potential for technology transfer. Improved urban service delivery is needed to improve the quality of life in urban population. Regulatory policy dialogue and enforcement of environmental regulations are needed to develop a sustainable clean growth in Sri Lanka. US-AEP approach to foster a transformation of clean growth is very relevant to Sri Lanka.

Sri Lanka�s present status and its economic, social and investment climate in the near future depend on influence of globalization, economic growth rate at a lower but steady rate between 4-5% per annum, relatively high per capita income of US $ 860, expanding middle class, trade treaties between India and Sri Lanka, lengthy war between the Government and the Tamil Separatist group LTTE, decreasing dependency on agricultural exports and Government policies to enhance private sector participation.

US-AEP Sri Lanka programs consists of two regional programs, namely the US-AEP and South Asia Regional Initiative on Energy (SARI/E). Colombo MPP defines US-AEP role as the promotion of cleaner technologies and improving energy use efficiency. Role of US-AEP program fits in well with USAID/Colombo primary SO "Increased Sri Lankan Competitiveness in the Global Marketplace." As in the past USAEP work in close collaboration with US-AEP partners, Sri Lanka Government (GOSL), World Bank and other bilateral and multilateral agencies to achieve US-AEP objectives.

Two major USAID projects Technical Initiative to the Private Sector (TIPS) and Agro Enterprises Development (Ag-Ent) will not be in operation beyond FY2000. TIPS and US-AEP supported industrial sector and ISO14000 activities and Ag-Ent used US-AEP help through NASDA to help food processing industry. Inquires and demand on US-AEP services in FY 2001 is expected to increase due to the closure of TIPS and Ag-Ent. SARI/E and recently established energy utility partnership between Bonneville Power Administration and Ceylon Electricity Board will engage US-AEP Sri Lanka more in energy sector activities.

Program objectives for FY2000/01 are to;

1. Increase US-AEP role in the energy sector management and energy use efficiency
2. Improve environmental management in solid waste, water quality and air quality
3. Promote partnerships between Sri Lanka and US companies to increase technology transfer.

We will mobilize US-AEP, SARI/E, USAID/Colombo and US Embassy resources and leverage resources of World Bank, Sri Lanka Govt., UN affiliated institutions, Sri Lanka Research Institutions, Universities and private sector. Primary focus areas are;

1. Air quality and energy sector activities
2. Environmental management systems
3. Increased trade and investment

In order to enrich and expand the US-AEP Sri Lanka program during the coming years during this year we will devote our time to study and identify successful US-AEP and USAID programs in Asia. In addition to country activities we will participate in regional programs of US-AEP and look into the possibility to develop new programs with International City Managers Association (ICMA) and Council of State Governments (CSG) and The Environmental Council of State (ECOS). We will obtain assistance and collaborate with US-AEP programs in India, Thailand, Philippines and Singapore to improve US-AEP Sri Lanka program.

US-AEP Sri Lanka received a new direction in April 1999 when the US-AEP office was brought under the supervision of the Director USAID/Colombo. Since then it has strengthened ties with Govt. agencies, Regulatory Bodies, Private Sector, Chambers of Commerce, Universities, Research Institutions and proved to be a useful resource to US Mission to Sri Lanka. Selected highlights of our contribution during last year include:

• Sponsoring a national survey on "Environmental Technologies Used by Sri Lanka Industry" covering about 160 industrial facilities with Federation of Chamber of Commerce and Industries of Sri Lanka (FCCISL) as the local partner. The Survey is expected to be completed by December 2000. We will use the results to help GOSL in industrial policy improvements related to environmental management and regulatory structure. It will also help us to identify areas where technology co-operation is needed.

• Technology Co-operation though helping Sri Lankans to participate in trade shows in USA, information dissemination via local catalog shows, multimedia presentations, USAID/Global Technology Network (GTN), individual consultations etc.

• Capacity building in the areas of petroleum waste management, medical waste, air quality monitoring and modeling, municipal solid waste, solid waste management, hazardous waste, power sector reform, energy use efficiency, packaging and food processing using US-AEP partner resources such as Environmental Exchange Program (EEP) and National Association of State Development Agencies (NASDA)

• Assisting US Embassy in environmental and energy sector activities and technical support to activities in Maldives.

• Improved relationships with World Bank, ADB, Govt. Institutions and Private Sector.

• Introduction of GLOBE educational programs in Sri Lanka and sponsoring environment day and earth day activities.

• Establishment of energy partnership between Ceylon Electricity Board and Bonneville Power Administration, Portland, Oregon by working with US Energy Association (USEA) and Ministry of Irrigation and Power.

• Helping Ministry of Forestry and Environment on air quality management and monitoring.

• Tour development and support for a Nepali minihydro power delegation to understand investment promotion procedures and power purchase agreements.

• Providing assistance to develop South Asia Regional Initiative on Energy (SARI/E) and addition of an energy expert to US-AEP/Sri Lanka team.

• Development of a number of potential trade and investment opportunities despite the countries unsettled condition. US-AEP assisted sales (unreported todate) around US $ 800,000 and pipeline of about $ 600,000 sales.

US-AEP strategic objective of sustained impact on the key people, institutions and forces that drive the movement to a clean revolution in Asia uses four following Intermediate Result (IR) areas

IR 1.1: Improved public policy and environmental regulations

IR 1.2: Improved urban environmental management

IR 1.3: Improved industrial environmental performance

IR 1.4: Increased transfer of US environmental technology, expertise and practices to Asia through trade and investment

We have organized US-AEP Sri Lanka strategic directional areas to reflect US-AEP Intermediate Result areas.

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During FY2000 US-AEP worked with Ministry of Forestry and Environment and Dr. Ajith Kaduwela from California Air Resources Board to bring institutions and individuals related to air quality management in the country together. During FY2001 US-AEP and World Bank (Environmental Action Plan 1) will join hands to help Ministry of Forestry and Environment to establish a co-ordinating unit for air quality improvement and to implement an improved air quality management strategy. US-AEP assistance will be used to expose senior officials to US-AEP successful programs on air quality improvement and to train staff. World Bank will provide the infrastructure support. US-AEP will help to bring private sector including automobile and lubricant distributors to participate in air quality improvement programs and provide logistical help for two local workshops. We will also provide resource personnel using US-AEP resources in the region.

We will develop a program to build the capacity of motor traffic department and traffic police on enforcement and work towards to design and implement an inspection certification system. We intend to participate in the programs that US-EPA has developed in India and to learn from the US-AEP experience in Thailand and Philippines on mobile air emissions, vehicle maintenance, improved traffic management and phasing out of unleaded gas.

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Expected Results: Improved capacity to design and implement air quality programs in country. Improved regulation and policy.

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Relationship to US-AEP Country Strategy: Air quality improvement

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Asian and Regional Partners:

Ministry of Forestry and Environment, National Building Research Organization

Ministry of Urban Development, Central Environmental Authority

University of Moratuwa, Dept. of Motor Vehicles, Sri Lanka Traffic Police

NGO�s and automobile and lubricant distributors

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Anticipated Cost Share:

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Milestone Dates:

Q2 � Tour to Thailand or Philippines by Govt. Officials and design of Sri Lanka program and a workshop to involve private sector and stakeholders

Q3 - Establishment of a co-ordinating center and training staff. Revisit and strengthen Cleanair 2000 plans developed in 1992.

Q4 - Develop a mobile air quality management system at pilot scale and increase public awareness. Develop a program for inspection and certification

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Lead Responsibility for US-AEP: Ananda Mallawatantri, US-AEP/Sri Lanka

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Date: Edited October 30, 2000

US-AEP Sri Lanka Activity # 2 IR 1.3

Activity Name: Improved energy efficiency

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A) POWER SECTOR REFORM

US-AEP will work very closely with USEA, SARI/E TA and Training contracts, World Bank, ADB, CEB and Ministry of Irrigation and Power and use SARI/E and US-AEP resources to facilitate the power sector reform process in Sri Lanka. (no cost)

B) ENERGY EFFICIENT BUILDINGS

We will identify and promote US developed technologies to improve energy use efficiency in air conditioning, ventilation and switching etc. Cost is to invite resource persons to workshops organized in Sri Lanka on Energy use efficiency. We have started communications with Alliance to Save Energy

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Expected Results: Activity A will provide a model rural off grid system. Improved energy sector management and better tariff structures will increase competitiveness. Increased energy use efficiency will reduce production costs and cost of living.

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Relationship to US-AEP Country Strategy: Increased energy sector activities

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Asian and Regional Partners:

World Bank, University of Moratuwa, DSM and Power Sector Reform office of CEB

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Anticipated Cost Share: World Bank GEF funds, Salaries of University Staff and Govt

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Milestone Dates: Q1-Q4

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Lead Responsibility for US-AEP: Ananda Mallawatantri, Upali Daranagama

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Date: Edited October 30, 2000

Activity Name: Regional SARI/E and energy partnerships

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A) SARI/E REGIONAL

SARI/E regional activities are not identified yet. We will provide host country support to SARI/E contractors and identify appropriate activities for SARI/E and US-AEP.

B) ENERGY PARTNERSHIPS

USEA Energy partnership between Bonneville Power Administration (BPA) and CEB and the intended regional energy partnerships through SARI/E will be used to improve corporate environmental management and to increase know-how between energy partners.

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Expected Results: Improved energy use efficiency through exchanges and energy partnerships.

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Relationship to US-AEP Country Strategy: Increased energy sector activities

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Asian and Regional Partners:

CEB, Energy Forum, Chamber of Commerce, University of Moratuwa, Sri Lanka Energy Managers Association and Ministry of Irrigation and Power, Energy Fourm

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Anticipated Cost Share: Staff time

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Milestone Dates: Q1-Q4

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Lead Responsibility for US-AEP: Ananda Mallawatantri, Upali Daranagama

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Date: Edited October 30, 2000

US-AEP Sri Lanka Activity # 4 IR 1.4

Activity Name: Alternative energy technologies

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A) SOLAR POWER FOR VILLAGES

WE will help GOSL to identify solar equipment suitable for fishing villages in off grid areas. NASDA � OPF (FY 2000) for travel of three key decision makers to USA and a TDA conditional training grant will be used. Activity is expected to take place in Q1, after the elections. We will co-ordinate.

B) IMPROVED COOK STOVES

Turbo stove developed by the Community Power Corporation (CPC), Littleton, CO, USA, will be tested and evaluated for Sri Lanka fuels. Steps involved. NASDA OPF (FY2000) has been issued and the activity will take place between Q1 to Q3.

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Expected Results: Promotion of alternative sources of energy, improved indoor air quality and technology transfer

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Relationship to US-AEP Country Strategy: Increased energy sector activities

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Asian and Regional Partners: Ministries of Science and Technology, World Bank

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Anticipated Cost Share: $

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Milestone Dates: Q1-Q4

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Lead Responsibility for US-AEP: Ananda Mallawatantri, Upali Daranagama

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Date: Edited October 30, 2000

Improved EMS is essential for Sri Lanka�s increased global competitiveness. USAEP/Sri Lanka sponsored survey on environmental technology use will highlight the areas to focus. US-AEP will work with the industry, Central Environmental Authority (CEA) and other agencies to identify technology gaps in industries and promote waste minimization, auditing and use of cleaner production systems. USAEP will provide help and guidance to public and private sector organizations working towards obtaining EMS certifications such as Green Globe, ISO14000 etc. Proposed NGO activities are expected to improve EMS in communities.

US-AEP Sri Lanka Activity # 5 IR 1.3

Activity Name: Industrial Management

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A) RESULTS OF INDUSTRIAL SURVEY

US-AEP/Sri Lanka sponsored a survey to "Understand and document environmental technologies used in Sri Lanka." will be completed and the results and observations will be available during early FY 2001. Preliminary observations made by the research team increased the interest of the business community, World Bank and the Government. During FY 2001 US-AEP/Sri Lanka will conduct a series of activities to use survey results to affect policies, implementation of environmental regulations and to help the industry to improve management practices. We will convey several stakeholder workshops to bring together industrialists, regulators, investors, and technology providers.

B) INTERNET BASED INFORMATION

US-AEP Sri Lanka will establish a web site to educate industry on weaknesses in current practices and to inform about best management practices. Web pages can also serve as the media to propagate product know-how and to create a discussion forum.

C) ISO 14,000

US-AEP will support UNDP and previous TIPS work to promote CP and ISO14000. We will support Small and Medium Enterprises Developers project of Federation of Chambers of Commerce and Industries activities to conduct regional workshops to promote CP. We will work to increase the number of certified ISO14,000 auditors in Sri Lanka .

D) ASIA PACIFIC ROUND TABLE ON CLEANER PRODUCTION (REGIONAL)

Selected number of Sri Lankans will participate in the conference

E) COMPETITIVENESS

USAID/Colombo main SO is "Improving Sri Lanka�s Competitiveness in the Global Market Place."

Sustainable capacity building for "Industry Clusters" may include a number of environmental activities such as waste minimization and management, use of ISO 14000 concepts, improved energy management etc. Industry clusters on Tea, Rubber, Information Technology, Jewelry and Tourism has been formed and Tea and Rubber Sectors are already requesting technical assistance from US-AEP for industrial waste management, CT, and energy management.

F) INDUSTRIAL SITES

Several industries are relocating to designated industrial zones to improve their competitiveness and to manage raw material requirements and waste better. US-AEP will develop a program to assist industrial sites on energy use efficiency, waste minimization and reduction. Assistance from a similar US-AEP program such as Kenan Institute, Thailand or another agency will be used to obtain expert help.

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Expected Results: Improved corporate environmental management, Increased access to EMS information, increased number of ISO14000 users.

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Relationship to US-AEP Country Strategy: Improved EMS

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Asian and Regional Partners:

Federation of Chamber of Commerce and Industries in Sri Lanka (FCCISL)

Ministries of Forestry and Environment, Economic Affairs and Industrial Development

Central Environmental Authority, UNDP and University of Moratuwa.

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Anticipated Cost Share: World Bank Environmental Action Plan activities, UNDP funds on CP, GOSL funds, Chambers time

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Milestone Dates: Q2 and Q3

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Lead Responsibility for US-AEP: Ananda Mallawatantri, US-AEP/Sri Lanka, IRG on Regional APRCP.

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Date: Edited October 30, 2000

US-AEP Sri Lanka Activity # 6 IR 1.2

Activity Name: Urban management

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A) WESTERN PROVINCIAL COUNCIL

US-AEP and RUDO will join hands to help City Development Strategy process sponsored by UNCHS (HABITAT) for Greater Colombo Area covering Colombo, Kotte Sri Jayawardenepura and Dehiwala Galkissa urban councils. US-AEP will assist Western Provincial Council to identify the right technologies for solid waste and medical waste management (no cost).

B) NGO-PRIVATE SECTOR PARTNERSHIPS

Sabaragamuwa Chamber of Commerce will establish an eco-business unit and work with NGO�s in the area to implement a model recycling and solid waste management scheme. It is expected that the solid waste management in the project area to become a sustainable eco-friendly business while providing an alternative to municipal solid waste management. A grant proposal by Sabaragamuwa Chambers was accepted by the US-AEP secretariat under NGO-Business partnership program.

C) IMPLEMENTATION OF GLOBE PROGRAM

D) INTRODUCTION OF ICMA CITY PARTNERSHIP

We will try to work with ICMA to develop a city to city partnership program.

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Expected Results: Better waste management system for Western Province, model community waste management program in Sabaragamuwa. Improved understanding of environmental impacts of improper disposal of municipal solid waste.

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Relationship to US-AEP Country Strategy: Increased environmental management

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Asian and Regional Partners: Western Provincial Council, Cities of Colombo, Sri Jayawardenepura Kotte and Dehiwala Galkissa, UNCHS, Sabaragamuwa Chamber of Commerce, Education Department, Central Environmental Authority, ICMA

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Anticipated Cost Share: US $

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Milestone Dates: Q1-Q3

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Lead Responsibility for US-AEP: Ananda Mallawatantri

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Date: Edited October 30, 2000

Trade shows and business exchanges help USA and local companies to better understand business environments and product technologies. NASDA, IIE assistance and Tech. Reps. close co-ordination will be provided to facilitate trade and investment. US-AEP/Sri Lanka will utilize information from US-EPA, WEF, A&WMA,USAEP financial information systems, GTN and others. We will try our best to attract US companies to work more in Sri Lanka and to establish joint ventures and partnerships with Sri Lanka companies.

US-AEP Sri Lanka Activity # 7 IR 1.4

Activity Name: Water and Wastewater

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A) WEFTEC 2000, Anaheim, California, USA � October 15-18, 2000

Tech Rep will recruit, organize, and lead delegation of businessman and decision-makers to the Annual Meeting and Exhibition of the Water Environment Federation (WEF) � USA. The delegates will have one-on-one meetings, visit wastewater treatment facilities and will have a spin-off site visits on their own to visit with US companies. Tech Rep will make a presentation on the "Environmental Business Opportunities in the Philippines" and will have one-on-one meetings. Limited NASDA support is requested

B) AMERICAN WATERWORKS ASSOCIATION CONFERENCE AND TRADE SHOW, June 2001

Water sector in Sri Lanka is expanding. US-AEP will support an Official from the Water Board and recruit a number of private sector companies for this show in Washington D.C. Limited NASDA support is requested.

C) CATALOG SHOWS AND TRADE SHOWS

USAEP/Sri Lanka will provide material to the US Embassy staff to display at the "Millennium Hotel Show" planned to be held in Maldives between November 04-07, 2000. We will combine Environmental Catalog Shows with Catalog Shows done by the Commercial Section of the US Embassy as in FY2000.

D) WATER SUPPLY AND SANITATION SCHEMES

We will work with US-AEP ADB liaison and Water Board to improve US company participation in this sector (no cost)

E) OIL AND WATER SEPERATION

US-AEP will work to introduce US develop oil separation technologies to service stations. In addition to technology information US-AEP will facilitate a formation of public-private partnerships to implement technology. (no cost)

F) LAKE RESTORATION

US-AEP introduced Cleanflo, Minnesota to Sri Lanka on restoration of surface water bodies. Lake in the historical City of Kandy is the first one to be promoted as a model site. US-AEP will help two City officials to go to Bombay to see Cleanflo technology in use.

G) WATER QUALITY ISSUES IN PRAWN FARMING

US-AEP will help to find a technological solution to the white spot disease in Prawns. Preliminary investigation suggested poor water quality management as the primary cause. US-AEP will support private sector investors on Shrimp Farming to find a technological and management solution developed in University of Texas.

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Increased trade and investment activities, higher number of trade leads, success stories, joint venture and distributorship agreements.

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Relationship to US-AEP Country Strategy: Increased trade and investment

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Asian and Regional Partners:

Water Board, Venture Capital Groups, FCCISL, US-AEP/ADB

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Anticipated Cost Share:

Cost share by trade show delegates, Govt. and US and SL companies

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Milestone Dates: Q1 - Q4

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Lead Responsibility for US-AEP: Ananda Mallawatantri

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Date: October 30, 2000

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Country: Sri Lanka

Activity Name: Solid Waste Management

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MUNICIPAL SOLID WASTE (MSW)

Help University of Moratuwa to test and optimize a high rate composting system to process MSW as the raw material and to develop a private business.

HAZARDOUS WASTE

Ministry of Industrial Development and Board of Investment is in the process of relocating highly polluting industries to industrial parks and to prepare plans to manage hazardous waste. Tech. Rep. will provide information and necessary assistance to select better technologies. (no cost)

MEDICAL WASTE

Medical waste is dumped along with MSW at present. US-AEP started working with the Ministry of Health, Colombo Municipality and a private contractor to promote SANITEC technology. So far the result is positive. We may have to facilitate a visit by a Govt. official to Philippines to demonstrate the technology

CATALOG SHOWS AND TRADE SHOWS

USAEP/Sri Lanka will combine resources with the Commercial Section of the US Embassy as in FY2000 to promote waste related trade.

WASTEXPO 2001

US-AEP will recruit about four delegates to attend WASTEXPO 2001.

A&WMA

US-AEP will recruit about four delegates to attend A&WMA 2001.

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Increased trade and investment activities, higher number of trade leads, success stories, joint venture and distributorship agreements.

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Relationship to US-AEP Country Strategy:

Increased trade and investment

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Asian and Regional Partners:

Central Environmental Authority, Colombo Municipality, Abans (Pvt.) Ltd. FICCISL, Industrial Research Institute (ITI), Ministry of Industrial Development.

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Anticipated Cost Share:

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Milestone Dates: Q1 - Q4

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Lead Responsibility for US-AEP: Ananda Mallawatantri

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Date: October 30, 2000