The International Monetary Fund (IMF) has announced that the approval of Sri Lanka’s fourth review under the Extended Fund Facility (EFF) is dependent on the government meeting key prior conditions, including the restoration of electricity cost recovery pricing.
Speaking at the IMF’s weekly press briefing, Spokesperson Julie Kozack explained that while a staff-level agreement was reached on April 25 between the IMF and Sri Lankan authorities, the final approval is subject to the IMF Executive Board’s decision, expected in the coming weeks.
However, Kozack emphasized that the exact timing of the board meeting hinges on two critical factors.
“The first is the implementation of prior actions, particularly restoring electricity cost recovery pricing and ensuring the proper functioning of the automatic electricity price adjustment mechanism,” she stated.
The second requirement is the completion of the financing assurances review. This review will evaluate whether Sri Lanka’s multilateral partners have confirmed their financing commitments and whether adequate progress has been made in the country’s debt restructuring efforts.
“In a nutshell,” Kozack said, “completion of the review is subject to board approval, which is contingent on these two matters.”
If approved, the review will unlock access to approximately USD 344 million in financing for Sri Lanka, providing a crucial boost as the country continues its economic recovery and reforms under the IMF-supported programme.
