The extension of the Uda Walawe irrigation scheme in southern Sri Lanka may have a significant ecological impact on the development area and its downstream wetlands. The evaluation of this impact is the subject for a long-term study that is presently being carried out by the International Water Management Institute (IWMI). In this study, the pre- development environmental conditions in the area are being investigated and the changes caused by the new irrigation system will be monitored in the future. Part of this study is a hydrological assessment of the coastal lagoon (Karagan Lewaya) and its small catchment to the south of the evelopment area. The lagoon is likely to receive high quantities of drainage flows from the future scheme. This could deteriorate its water quality and hence affect the suitability of the lagoon as a habitat for migratory birds and might lead to flooding of adjacent settlements.