By: Staff Writer
November 20, Colombo (LNW): Sri Lanka has secured a vital lifeline from the Asian Development Bank (ADB), finalizing three major loan agreements worth a combined USD 300 million aimed at bolstering its financial stability, macroeconomic resilience, and long-term tourism potential. The deals were inked on 17 November 2025 at the Treasury in Colombo by Secretary to the Ministry of Finance, Dr. Harshana Suriyapperuma, and Takafumi Kadono, ADB’s Country Director for Sri Lanka.
Under the Financial Sector Stability and Reforms Program (Subprogram 3), Sri Lanka will receive USD 100 million after completing 11 policy actions focused on strengthening banking sector governance, improving asset quality, and expanding access to more inclusive and sustainable finance. The funding is intended to deepen systemic resilience and bolster the Central Bank’s regulatory capacity, marking the final stage of a multiyear reform effort targeting financial stability.
Another USD 100 million will support the Strengthening Macroeconomic Resilience and Transparency Program (Subprogram 1). This policy-based loan is linked to reforms that improve public financial management, enhance expenditure discipline, and boost domestic revenue mobilization. The funding complements Sri Lanka’s IMF-aligned reform program, reinforcing macroeconomic stability and supporting the government’s broader economic recovery.
The remaining USD 100 million is allocated to the Sustainable Tourism Sector Development Program (Subprogram 1), comprising a USD 70 million policy-based loan and a USD 30 million investment loan. The policy component will fund institutional reforms, capacity-building initiatives, and incentives to attract stronger private-sector participation in tourism. The investment portion is aimed at expanding infrastructure in Trincomalee and Dambulla/Sigiriya, improving destination management, easing congestion at key sites, extending the average duration of tourist stays, and boosting regional economic contribution.
The Ministry of Finance, Planning & Economic Development will oversee the policy-based loan programs, while the Ministry of Transport, Highways & Urban Development will implement the tourism infrastructure component. The government expects these reforms to accelerate recovery, reinforce financial resilience, and catalyze inclusive growth across multiple sectors.
Earlier in 2025, ADB reaffirmed its support with a USD 790 million pipeline of new loans and USD 6.9 million in grants aligned with Sri Lanka’s IMF-backed reform program. Although tourist arrivals in 2025 have rebounded to 2018 levels, earnings remain below pre-pandemic norms, highlighting the importance of the tourism-focused investment. ADB’s long-term roadmap for Sri Lanka (2024–2028) emphasizes restoring macroeconomic stability, accelerating domestic resource mobilization, and driving inclusive recovery through structural reforms.
This USD 300 million assistance from ADB represents a multidimensional package, supporting not only immediate fiscal and macroeconomic needs but also deep structural reforms in the banking system, governance, and tourism infrastructure. If successfully implemented, the program is expected to strengthen Sri Lanka’s foundation for sustainable and inclusive growth, helping the country recover from past economic shocks while positioning it for long-term development.
