Sri Lanka is increasingly positioning higher education not merely as a public service, but as a strategic economic asset. With literacy rates among the highest in South Asia and a long-established education framework inherited from the British system, policymakers now see education-led urban development as a new frontier for investment, exports, and skilled employment growth.
The Board of Investment’s push to develop University Towns in Keragala and Sooriyawewa reflects this shift. Globally, education hubs generate strong multiplier effects driving demand for housing, transport, healthcare, retail, and professional services.
For Sri Lanka, still recovering from its economic crisis, such projects offer a rare combination of foreign exchange inflows, private capital mobilisation, and long-term human capital development.
The proposed Keragala University Town, located in the Gampaha District already the country’s largest student catchment has been structured as a 125-acre, master-planned campus hosting five universities.
With shared facilities and proximity to industrial zones, the model aims to integrate academic learning with industrial training. The BOI estimates investment needs of USD 370 million, with projected returns of 15–18% and a 6–7 year payback, figures that compare favourably with regional education developments.
The Sooriyawewa University Town in Hambantota is even more ambitious. Spread across 250 acres, it is designed as an integrated education and innovation ecosystem, combining higher education, vocational institutes, research centres, startup incubators, and digital learning platforms.
With projected investments of USD 640 million, the project targets global education providers seeking scale, lower operating costs, and access to South Asian markets.
The economic impact extends well beyond tuition revenues. International students bring foreign currency, while research and innovation hubs support higher productivity and technology transfer. Countries such as Malaysia and the UAE have demonstrated how education cities can generate billions annually while upgrading domestic skills.
Sri Lanka’s advantage lies in cost competitiveness, English-language instruction, and geographic proximity to South Asia, the Middle East, and East Africa. Improved connectivity to airports and business districts further strengthens the investment case.
If executed effectively, University Towns could diversify Sri Lanka’s services exports, reduce brain drain by retaining local talent, and position the country as a regional education destination turning classrooms into catalysts for long-term economic resilience.
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