The Asian Development Bank (ADB) has approved a $100 million financing package to support Sri Lanka’s ongoing efforts to strengthen macroeconomic resilience, fiscal governance, and sustainable growth following its recent economic crisis. The program aims to reinforce public expenditure management, improve revenue mobilization, and foster greater private sector participation to help the country maintain stability and restore investor confidence.
According to ADB Country Director for Sri Lanka, Takafumi Kadono, the program will build on Sri Lanka’s progress in restoring fiscal and debt sustainability. He emphasized that ADB’s support will focus on improving fiscal governance, strengthening the efficiency and accountability of public institutions, and creating a more predictable investment environment. These reforms are designed to promote inclusive and sustainable growth while improving the credibility and execution of public spending.
A key component of the program will enhance transparency and efficiency in public expenditure management, ensuring better budget planning and more effective allocation of resources. By streamlining budgetary processes and optimizing the use of public funds, the initiative will help Sri Lanka strengthen financial discipline and improve service delivery.
The program also seeks to boost domestic revenue mobilization by improving tax compliance and administration. This includes developing and implementing a multiyear tax compliance strategy, enhancing international tax cooperation, and leveraging Sri Lanka’s recent membership in the Global Forum on Transparency and Exchange of Information for Tax Purposes to strengthen its fiscal base.
Additionally, ADB’s support will help create a more enabling environment for private sector participation by advancing a new legal framework for public–private partnerships (PPP) aligned with international best practices. The initiative will also aim to attract climate finance and mobilize private investment for sustainable infrastructure. Strengthening the management, transparency, and accountability of state-owned enterprises (SOEs) is another major objective, improving their performance and reducing fiscal risks.
The program will further introduce several first-time initiatives in Sri Lanka, including the development of a Fiscal Risk Statement, a national climate finance strategy, and a PPP law to guide private investment in public projects. It will also address gender gaps through tools such as Sustainable Development Goals (SDG) budget tagging, a gender-sensitive Nationally Determined Contribution, and reforms in public procurement to ensure inclusivity and equitable impact. These measures, supported by new institutional frameworks like the SOE credit risk framework and specialized monitoring units, are designed to ensure lasting improvements in governance and fiscal resilience.
Founded in 1966, the Asian Development Bank continues to be a key development partner in Asia and the Pacific, promoting inclusive, resilient, and sustainable growth. With 69 member countries, ADB leverages financial innovation and strategic partnerships to advance infrastructure development, strengthen economies, and improve lives across the region.
