The Asian Development Bank (ADB) has announced a preliminary allocation of $900 million for Sri Lanka in 2025, aimed at supporting economic recovery and infrastructure development.
The Manila-based financial institution has provided $12.6 billion in assistance to Sri Lanka since 1966. This latest funding, which follows $808 million in approved projects in 2024, will be directed towards power, agriculture, finance, tourism, skills development, and macroeconomic stability, according to senior ADB officials in Sri Lanka.
The ADB has stated that its financial assistance will be provided through policy-based loans, results-based lending, investment projects, and technical assistance. In collaboration with institutions such as the World Bank and the International Monetary Fund (IMF), the ADB aims to ensure that Sri Lanka’s financing remains well-coordinated within the IMF’s economic framework.
“The 2025 support will focus on power, agriculture, finance, tourism, skills development, and macroeconomic stability,” said Cholpon Mambetova, ADB’s Country Operations Head.
ADB Country Director Takafumi Kadono clarified that the bank does not provide direct budget support but instead focuses on ensuring Sri Lanka undertakes structural and policy reforms to address deep-rooted economic weaknesses.
“Investments that we finance are the critical ones and not just the ‘good to have,’” Kadono stated, adding that ADB-funded projects undergo a thorough due diligence process to ensure long-term sustainability and impact.
ADB currently maintains an active portfolio of $4 billion in Sri Lanka, spanning 27 projects, 36 loans, and four grants. In March 2025, the Country Programming Mission will finalise Sri Lanka’s project pipeline for 2025-2028, determining how future funding will be allocated.
Among the major ADB-backed projects in 2024 were:
• The Moragolla Hydro Power Project
• Transport Interventions Project
• Energy Activities Support Facility (SEFF)
• The Mahaweli Water Security Investment Program
• Financial Sector and Tourism Development Initiatives
The power sector was a major focus, with ADB approving funding to improve grid reliability and enhance Sri Lanka’s capacity for renewable energy integration.
As part of its Vision 2030 strategy, the ADB aims to tackle climate change, promote private sector growth, and foster knowledge exchange to ensure long-term economic resilience.
Despite optimism surrounding Sri Lanka’s economic recovery, ADB economists warn that the country’s growth trajectory remains fragile. Much depends on the 2025 Budget and the government’s policy measures in ensuring sustained financial stability.
A Tripartite Portfolio Review Meeting (TPRM) will be held in early 2025 between ADB, the Sri Lankan Ministry of Finance, and other key ministries to assess the progress of the $4 billion in ongoing projects. The review will focus on implementation efficiency, challenges, and solutions.
“So far, we have had a good year, and in terms of project implementation, none of our projects are at risk,” Mambetova stated.
“I think in the context of Sri Lanka, it’s important to note that we have a multilateral development role. When no other banks are lending, when the country cannot access the capital market, when the country needs financing, we provide that,” Mambetova remarked.
