By: Staff Writer
February 16, Colombo (LNW): The Asian Development Bank (ADB) has reaffirmed its dedication to supporting Sri Lanka’s economic recovery with a comprehensive $900 million investment pipeline for 2025.
This initiative is part of a broader effort to stabilize the country’s economy, enhance key sectors, and align with the International Monetary Fund (IMF)-backed reform framework. Beyond financial support, ADB aims to drive policy reforms, institutional strengthening, and knowledge-sharing to foster sustainable growth.
During a briefing on ADB’s 2024 portfolio performance and future plans, ADB Country Director Takafumi Kadono underscored the bank’s commitment to Sri Lanka’s development agenda. He emphasized that ADB’s involvement extends beyond financing to include policy advisory services and capacity-building efforts.
ADB Country Operations Head Cholpon Mambetova elaborated on the strategic focus for 2025, highlighting the $900 million indicative investment earmarked for key sectors such as macroeconomic stability, energy, agriculture, finance, tourism, and skills development. These initiatives will be executed through various funding modalities, including policy-based loans, results-based lending, investment projects, and technical assistance programs.
As of January 1, 2025, ADB’s active sovereign lending portfolio stands at $4 billion, encompassing 27 projects with 36 loans and four grants. These initiatives target critical areas such as energy, transportation, human development, governance, financial sector stability, and urban development.
In 2024, ADB approved $808 million in funding for projects aimed at strengthening the power sector, supporting small and medium enterprises (SMEs), enhancing water supply and sanitation, and ensuring fiscal sustainability. Recognizing Sri Lanka’s constrained fiscal space, ADB is prioritizing the mobilization of private sector investments, with Public-Private Partnerships (PPPs) identified as a key strategy for infrastructure development and service delivery.
Kadono highlighted the significance of the Port Access Elevated Highway project, funded by ADB, which is set to open in the second half of 2025. He also noted that while Sri Lanka’s economic growth exceeded expectations in 2024, driven by the construction and services sectors, the country’s 2025 growth outlook remains cautiously optimistic. Tourism and financial services are expected to be primary drivers of economic expansion.
In addition to direct project financing, ADB is leveraging blended finance mechanisms and development partnerships to secure additional resources. Kadono reiterated that ADB’s support is not just about lending but about ensuring structural and policy reforms that will create a resilient and inclusive economy.
ADB has been a key development partner to Sri Lanka for decades, providing cumulative assistance exceeding $12.6 billion since 1966. With the country still facing limited access to global financial markets due to ongoing debt restructuring, ADB’s role has become even more crucial. The bank remains a vital funding source, particularly as bilateral financial flows remain uncertain and investor confidence gradually recovers.
Kadono further stressed the importance of revenue mobilization and public sector reforms, with ADB’s assistance tied to concrete fiscal and governance milestones. He highlighted the restructuring of State-Owned Enterprises (SOEs) as a priority, particularly in sectors plagued by inefficiencies and financial losses. By addressing these challenges, ADB aims to support Sri Lanka in building a more stable and self-sufficient economy.
