The Asian Development Bank (ADB) has approved a $100 million financing package to build on Sri Lanka’s progress toward macroeconomic stability and to help achieve sustainable growth following the economic crisis. 

This will be done by strengthening public expenditure management, improving revenue mobilization, and fostering private sector participation.

“Sri Lanka has made commendable progress in restoring fiscal and debt sustainability following an unprecedented economic crisis,” said ADB Country Director for Sri Lanka Takafumi Kadono. “We will work closely with the government to restore macroeconomic stability and promote inclusive, sustainable growth by strengthening Sri Lanka’s fiscal governance and build a more efficient, accountable, and resilient public sector. 

This program also aims to improve the credibility and execution of public expenditure, enhance domestic revenue mobilization, and foster a more predictable and transparent investment climate.”

This program will help improve efficiency and transparency in public expenditure management through a comprehensive approach that streamlines budgetary processes and optimizes resource allocation to ensure the effective utilization of public funds.

In addition, it will enhance revenue mobilization by strengthening revenue generation through stronger domestic and international tax compliance such as the development and implementation of a multiyear tax compliance improvement strategy and by further deepening international tax cooperation following Sri Lanka’s recent membership to the Global Forum on Transparency and Exchange of Information for Tax Purposes.

The program will support the government’s efforts to improve the enabling environment for private sector participation, including developing a legal framework for public–private partnerships (PPP) that is aligned with international best practices and mobilizing additional climate finance and private investment. It will also focus on strengthening the management, transparency, and accountability of state-owned enterprises (SOE).

Several first-time initiatives in Sri Lanka will be supported. In addition to the draft PPP law, this includes a comprehensive Fiscal Risk Statement and a climate finance strategy that aims to crowd in other sources of finance to support Sri Lanka’s climate ambition and resilience. 

It also addresses gender gaps through Sustainable Development Goals budget tagging, a new gender sensitive Nationally Determined Contribution, and public procurement reforms to enhance its development impact and inclusivity. These innovations, together with newly established institutional mechanisms—such as the SOE credit risk framework and specialized monitoring units—lay the foundation for sustained impact.

ADB is a leading multilateral development bank supporting inclusive, resilient, and sustainable growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.

Source: ADB 

--Agencies