Press Releases
Assistance from Government of India for rehabilitation and reconstruction efforts in Sri Lanka in the aftermath of Cyclone Ditwah
Assistance from Government of India for rehabilitation and reconstruction efforts in Sri Lanka in the aftermath of Cyclone Ditwah
Sri Lanka endured one of the most devastating disasters in recent decades as a result of Cyclone Ditwah, which struck in late November 2025. As per the Post Disaster Needs Assessment (PDNA) conducted by the Department of National Planning together with the Disaster Management Center (DMC), the disaster caused approximately United States Dollars (USD) 2.1 billion in damage, USD 1.4 billion in economic losses and estimated recovery needs amount to USD 3.5 billion. The government of India assisted the disaster relief actions of Sri Lanka under its “Operation Sagar Bandhu”.
During the visit of Hon. Minister of External Affairs of India on December 22, 2025 the Hon. Minister has announced the Government of India’s commitment to provide additional assistance to Sri Lanka as a disaster relief package under “Operation Sagar Bandhu.” The total value of this package is USD 450 million. Of this amount USD 350 million will be provided as Line of Credits and the balance USD 100 million will be provided as a grant.
The loan of USD 350 million will be extended through two Lines of Credit (LOCs), namely Long-Term Line of Credit and Short-Term Line of Credit. The Long- Term Line of Credit will be utilized to finance activities related to infrastructure, connectivity, and development cooperation. In particular, it has been proposed that the loan be utilized for the reconstruction of the up-country railway line which was significantly damaged as a result of the disaster. An amount of Indian Rupees 2400 crores (approximately USD 250 million) has been allocated for these projects. The Short-Term Line of Credit will be utilized to finance the procurement of Essential commodities, including health, Agriculture and any other sectors mutually agreed upon by the Government of India and Government of Sri Lanka. A total amount of Indian Rupees 950 crores (approximately USD 100 million) has been allocated for the Short-Term Line of Credit.
Upon completion of the required regulatory procedures relating to the Lines of Credit (LOCs), the Loan Agreements were signed by Dr. Harshana Suriyapperuma, Secretary to the Ministry of Finance, Planning and Economic Development, on behalf of the Government of Sri Lanka and Mr. Vikramaditya Ugra, Chief General Manager of the Export-Import Bank of India (EXIM Bank of India), on behalf of the Government of India. An official Ceremony for the exchange of the singed Loan Agreements was held on 05 August 2026 at the Presidential Secretariat.
The conclusion of the bilateral Agreements will certainly pave the way to developing further the deep and longstanding bilateral relationships between the Government of India and the Government of Sri Lanka.
Ministry of Finance, Planning and Economic Development
Colombo 01
On August 05, 2026
Financial Assistance from the Asian Development Bank for the Strengthening Integrated Health Care and Governance for Universal Health Coverage Program
The Government of Sri Lanka had discussions with the Asian Development Bank to mobilize a loan amounting to USD 100 million coupled with an externally financed grant amounting to USD 6.9 million from the Pandemic Prevention, Preparedness and Response Trust Fund (Pandemic Fund) for the Implementation of the Strengthening Integrated Health Care and Governance for Universal Health Coverage Program under the Result-based Lending modality.
The above loan of USD 100 million under the Regular Ordinary Capital Resources of ADB will be obtained to support national strategic framework for the development of health services for improved efficiency and quality of secondary health services as first referral care for ensuring universal health coverage. Further, this program comprises of three outputs which will mainly focus on (i) enhancing first referral care services, (ii) enhancing pandemic prevention, preparedness, and response and (iii) improving health sector technical capacity and pharmaceutical supply chain management.
The Ministry of Health and Mass Media will mainly be the Executing and Implementing Agency while the nine Provincial Departments of Health Services will also act as Implementing Agencies of the above program.
The Loan and the Grant Agreements were signed on 17 October 2025 between the Government of Sri Lanka and the Asian Development Bank at the Treasury in Colombo by Dr. Harshana Suriyapperuma, Secretary, Ministry of Finance, Planning and Economic Development, on behalf of the Government of Sri Lanka and Mr. Takafumi Kadono, Country Director, ADB Sri Lanka Residence Mission, on behalf of the Asian Development Bank.
Ministry of Finance, Planning and Economic Development
17 October 2025
Japanese Yen One Thousand and Six Hundred Million (approximately LKR 3.3 billion) Grant Assistances from Government of Japan Signing of the Agent Agreements
At the request of the Government of Sri Lanka, the Government of Japan has agreed to provide grant assistance amounting to Japanese Yen one thousand and Six hundred million (approximately LKR 3.3 billion) under the Japanese Economic and Social Development Programme, considering the requirements of diversified fields namely marine environment, healthcare, vocational training and fishing.
The Exchange of Notes pertaining to the above grant were signed by the Secretary to the Ministry of Finance, Economic Stabilization, and National Policies, Mr. K.M. Mahinda Siriwardana, on behalf of the Government of Sri Lanka and His Excellency the Ambassador of Japan in Sri Lanka, Mr. MIZUKOSHI Hideaki on March 18, 2024.
The following activities will be implemented under the above grant assistance.
a) Provision of four vessels for oil boom with the necessary accessories, a generator, and a cargo truck with a crane for improving oil spill response and management of the Sri Lanka Coast Guard;
b) Provision of portable ultrasonic scanners, gynecological examination tables, a laparoscopic system, mammography, fetal heart raters, and infant warmers for improving the maternal and pediatric care in Northern Province and industrial sewing machines, zigzag (industrial) machines, overclock (5 thread) machines, and button holder (5 thread, industrial) machines for dressmaker courses at vocational training centers in Northern Province;
c) Provision of a petrol boat, a rigid-hull inflatable boat, lighted buoys, and HG radio transceivers, for ensuring the safety of fishermen in Northern and Eastern provinces;
The Agent Agreements for the procurement of equipment and implementation of above projects were signed between Mr. Ajith Abeysekera, Director General, Department of External Resources on behalf of the Government of Sri Lanka, and Mr. NOMURA Tetsuya, Project Manager, Japan International Cooperation System (JICS), on April 24, 2024, at the Ministry of Finance, Economic Stabilization, and National Policies.
Ministry of Finance, Economic Stabilization and National Policies
Colombo 01
On April 24, 2024
Japan Grants Rs. 687 Million for Sri Lankan Officials' Postgraduate Education under JDS Programme
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On 24th July, the Governments of Sri Lanka and Japan reaffirmed their commitment to strengthening bilateral relations by signing agreements to continue the Japanese Grant Aid for Human Resources Development Scholarship (JDS) Programme, which supports the professional development of young executive-level officials in Sri Lanka’s public service."
Under the initiative, the Government of Japan has allocated JPY 332 million (approximately Rs. 687 million) for this year’s programme. The JDS Programme, funded through Japan’s Official Development Assistance and implemented by the Japan International Cooperation Agency (JICA), offers scholarships for postgraduate studies in Japan. Since its inception in 2010, the programme has awarded 240 Master’s and 16 PhD scholarships to Sri Lankan executive-level officials.
Currently in its Fourth Framework (2022–2025), the JDS Programme is expected to contribute to Sri Lanka’s socio-economic development and strengthen bilateral ties between the two nations. The Government of Sri Lanka views this initiative as a key investment in public sector capacity-building and a cornerstone of the long-standing partnership with Japan.
The Exchange of Notes between the Governments of Sri Lanka and Japan, along with a Grant Agreement between the Government of Sri Lanka and JICA, was signed on 24th July 2025 at the Ministry of Finance, Planning and Economic Development. The documents were signed by Dr. Harshana Suriyapperuma, Secretary to the Treasury and the Ministry of Finance, on behalf of the Government of Sri Lanka, and His Excellency Mr. ISOMATA Akio, Ambassador of Japan to Sri Lanka, on behalf of the Government of Japan; and Mr. KURONUMA Kenji, Chief Representative of JICA, on behalf of JICA.
Financing of USD 100 million from the Asian Development Bank to boost Small and Medium-sized Enterprises (SME) of Sri Lanka
Since 2015, the Government of Sri Lanka engaged in discussions with the Asian Development Bank (ADB) to mobilize necessary financial assistance amounting to USD 452.5 million to support the Small and Medium – Sized Enterprises (SMEs) of the country.
Accordingly, the original credit line of USD 100 million, which is a financial intermediation loan through 10 participating financial institutions (PFIs) to eligible SME subprojects became effective in April 2016. The loan was financially closed in January 2019, 1.5 years earlier than the initial plan. It had exceeded development targets on reaching out to underserved SMEs, including women-led, first-time borrowers, and those located outside Colombo. Considering the high demand from the sector, an additional USD 75 million (the first additional financing) and a USD 9.5 million grant (the second additional financing) from We-Fi were mobilized in 2018 as further assistance to the sector.
In November 2020, the Government of Sri Lanka entered into loan and grant agreements with ADB to obtain another loan of USD 165 million and grants worth of USD 3 million from the Japan Fund for Poverty Reduction (JFPR), to provide further assistance as a credit line to SMEs.
Since 2022, the Ministry of Finance, Economic Stabilization and National Policies continuously engaged in discussions with ADB to ensure further assistance to the SME Sector which faced severe difficulties due to the effects of unprecedented COVID 19 pandemic and consequent economic crisis situation and hence, had negotiations with ADB in 2023 to mobilize USD 100 million and Technical Assistance (TA) on grant basis to finance the “Enhancing Small and Medium-sized Enterprises (SME) Finance Project” in order to further enhance SME’s access to finance.
This project is an important component of the government’s comprehensive economic reform strategy. The reform measures implemented over the last 2 years have been successful in stabilizing the economy, and in parallel, measures have been put in place to shift economic trajectory from stabilization to growth. Considering the fact that revitalisation of the SME sector is a crucial component of economic recovery, the government commenced technical discussions with ADB over a year ago in order to design this project to address key financial constraints faced by SMEs.
As the backbone of Sri Lanka's economy, SMEs represent over 75 percent of all businesses, and contribute more than 50 percent to the country's Gross Domestic Production (GDP). SMEs are estimated to generate employment for over 45% of the workforce, thereby creating significant spill-over impacts on the economy as a whole. Following significant challenges stemming from a series of shocks, including the COVID-19 pandemic and the prevailing economic downturn, the SME sector has faced substantial disruptions to their normal business operations largely due to factors beyond their control. Accordingly, the Government of Sri Lanka considered it a priority to address these challenges through early interventions, of which this project is a key component. USD 50 million of the ADB financing will be allocated towards a SME line of credit loan scheme which will facilitate easier access to finance for SMEs. This will be a crucial financial injection which will support the stabilization of SMEs and set the foundation for sustainable growth and SME’s contribution to the recovery of the Sri Lankan economy.
One of the key challenges faced by SMEs in the past has been the inability to adequately utilize credit lines or concessional loan schemes due to perceived credit risk and associated requirements for collateral and guarantees. To remedy this constraint, the Government has taken a strategic step by incorporating the National Credit Guarantee Institution (NCGI) as a public limited company, to address the issue of collateral and guarantees. This initiative aims to provide partial credit guarantees for SMEs, offering them a sustainable solution to their financing challenges. USD 50 million of the ADB financing will be allocated as the Government's initial capital infusion into the NCGI.
The Ministry of Finance, Economic Stabilization and National Policies (MOF) will be the executing agency of the above program and will implement the project in collaboration with the Department of Development Finance and NCGI.
The loan agreement to borrow the above loan of USD 100 million was signed between the Government of Sri Lanka and the Asian Development Bank today at the General Treasury in Colombo. Mr. K. M. Mahinda Siriwardana, Secretary to the Treasury, and the Ministry of Finance, Economic Stabilization and National Policies, placed his signature on behalf of the Government of Sri Lanka, and Mr. Utsav Kumar, Principal Country Economist, ADB Sri Lanka Residence Mission, signed on behalf of the Asian Development Bank.
Department of External Resources
Ministry of Finance, Economic Stabilization and National Policies
25 March 2024