ADB signals shift toward investment projects in Sri Lanka

The Asian Development Bank (ADB) announced plans to gradually shift its focus in Sri Lanka from budget support to investment projects, as the country shows signs of economic recovery.

“As the economy recovers and the government’s fiscal position strengthens, we will expand our support to investment projects, to ensure the government’s growth and development objectives are achieved,” said ADB Country Director for Sri Lanka Takafumi Kadono.

While maintaining support for traditional sectors, where the ADB has had a long-standing presence, including energy, water and sanitation, education and skill development and transport, the institution is also looking to align with the emerging national priorities.

“The new pipeline is expected to include new areas such as tourism and digitalisation, in line with the evolving development priorities,” Kadono added.

He went on to reaffirm commitment to Sri Lanka, asserting the agency would remain a steadfast partner to support the island nation in securing a strong and durable recovery.

In 2024, the ADB approved seven loans totalling US $ 808 million, including three policy-based loans amounting to US $ 400 million, to support the government’s budget.

The ADB has also lined up a similar volume of budget support for 2025, aiming to continue backing the government’s ambitious reform agenda in sectors such as energy, finance, tourism, trade and public financial management.

However, Kadono indicated that the ADB’s approach would evolve alongside Sri Lanka’s improving fiscal health.