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