IMF says Sri Lanka’s electricity pricing policy remains tied to cost recovery
January 16, 2026 08:25 am
The International Monetary Fund (IMF) has indicated that there is no immediate change to the electricity pricing objectives under Sri Lanka’s IMF-supported program, reaffirming the importance of maintaining cost recovery in the utility sector.
Responding to an inquiry during a press briefing yesterday (15), IMF Communications Department Director Julie Kozack said that the program includes a firm commitment to ensuring cost recovery in electricity tariffs.
She emphasized that this is critical for Sri Lanka’s fiscal sustainability, as it helps prevent state-owned utility companies from incurring financial losses.
Kozack noted that any future adjustments needed to support Sri Lanka would be discussed between IMF staff and Sri Lankan authorities during ongoing fact-finding engagements. She stressed that such discussions would take into account the country’s current economic conditions and recovery needs.
“Our goal is to help Sri Lanka as it recovers from the catastrophic hurricane and to provide our support in whatever way, in line with our own mandate around helping Sri Lanka maintain macroeconomic stability,” she said.
Meanwhile, IMF Mission Chief for Sri Lanka Evan Papageorgiou announced that an IMF staff team will visit Sri Lanka from January 22 to January 28, 2026, to assess the size and scope of the damage caused by Cyclone Ditwah. He said the mission’s findings will inform subsequent discussions on the IMF-supported program.
Papageorgiou stated that the visit reflects the IMF’s commitment to assisting Sri Lanka as it confronts the economic and humanitarian challenges arising from the cyclone. During the mission, IMF staff will engage with government officials and other stakeholders to evaluate the impact on infrastructure, livelihoods, and overall economic stability.
“The IMF team will explore how it can best assist Sri Lanka in its recovery efforts, including by resuming the Extended Fund Facility-supported program and offering policy advice and technical assistance to promote resilience and sustainable growth. Further communication will be provided at the end of the mission,” he added.
