World Bank Approves $150 Million to Fuel Sri Lanka’s Economic Growth and Resilience

In a major move to transition Sri Lanka from economic stabilization to long-term development, the World Bank’s Board of Executive Directors has approved US$150 million in financing to back the country’s comprehensive reform agenda.

The funding is part of the Sri Lanka Reforms for Growth, Resilience and Openness Development Policy Operation (REGROW DPO). This initiative marks the first in a planned series of three operations designed to unlock private sector-led growth, boost investment, and generate high-value jobs across the island nation.

The first operation provides budget support anchored in reforms to reduce trade barriers, improve the investment climate, strengthen the financial sector. It also supports measures to expand women’s employment, improve the performance and governance of state-owned enterprises (SOEs), and enhance power sector competitiveness to deliver better services and lower energy costs.

“Sri Lanka has made significant progress in stabilizing its economy, and now it is critical to advance reforms that can unlock private investment, facilitate high value export and create jobs,” said Gevorg Sargsyan, World Bank Group Country Manager for Sri Lanka. “The REGROW DPO supports the transition to a more competitive, transparent, and resilient economy – one that can deliver sustainable and inclusive growth for all Sri Lankans.”

This latest financial injection reinforces the World Bank Group’s 70-year history of partnership with Sri Lanka. The organization currently manages an active portfolio of 13 projects in the country, totaling over $1.5 billion. These projects span critical public sectors including education, healthcare, energy, transportation, agriculture, and social safety nets.

Furthermore, the International Finance Corporation (IFC)—the private sector arm of the World Bank Group—has separately committed nearly $1.8 billion in short- and long-term financing to Sri Lanka’s private sector between 2021 and 2026 to ensure sustained economic momentum.