IMF highlights 15% electricity tariff hike as key step for $344M tranche

The International Monetary Fund (IMF) has acknowledged Sri Lanka’s continued progress under its economic reform program, with the country now nearing access to the next tranche of IMF funding worth approximately USD 344 million.

Speaking at the IMF’s weekly press briefing, IMF Spokesperson Julie Kozack said that a Staff-Level Agreement had been reached on April 25 between IMF staff and Sri Lankan authorities, marking the completion of the fourth review of the ongoing reform agenda.

“The program and Sri Lanka’s ambitious reform agenda continue to deliver commendable outcomes.  Performance under the program remains strong overall, and the government remains committed to program objectives,” Kozack stated.

However, she emphasized that the release of funds is pending approval by the IMF’s Executive Board, which is subject to the completion of agreed prior actions.

“Completion of the review is pending approval of the IMF’s Executive Board, and it is contingent on the completion of prior actions,” she said.

Among these prior actions are two key measures recently taken by Sri Lanka:

• A 15% increase in electricity tariffs, and;

• The publication of revised bulk supply transaction account guidelines.

These actions, announced by the regulator on June 11, are part of the broader structural reforms aimed at restoring macroeconomic stability and ensuring sustainable growth, she said.

Kozack further noted that the IMF team remains closely engaged with Sri Lankan authorities to assess and support these steps.

The date for the IMF Executive Board’s decision on the review and subsequent disbursement will be announced in the coming days.

“Once the review is completed by our Executive Board, Sri Lanka would have access to about $344 million in financing, and we will announce the Board date for Sri Lanka in due course,” she added.