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A delegation of NEDA comprising Mr. Rappipat Promnart, Director of Policy and Planning Bureau & Mr. Wasit Anuntavichien, Policy and Planning Analyst of the Neighbouring Countries Economic Development Agency (NEDA) visited Sri Lanka during April 09 -10, 2024. The delegation who arrived at the request of ERD, met Mr. Ajith Abeysekera, Director General, Department of External Resources (ERD) and other Treasury Officials on the 09th of April, 2024. This meeting was a stepping stone to embark on a promising future collaboration between Thailand and Sri Lanka in terms of development cooperation.

Commenting on the longstanding cultural ties between Thailand Sri Lanka, the Director General of ERD, welcomed the NEDA’s Technical & Financial Assistance. Further, the Director General, mentioned about the potential NEDA support for the Sri Lanka’s proposed Public Debt Management Office (PDMO). Mr. Rappipat Promnart, Director of Policy and Planning Bureau warmly welcomed the proposal and invited around 20 officials from the potential officers who will be engaged in working with the proposed PDMO, to visit Thailand Debt Management Office during October/ November. Moreover, the delegation expressed their willingness to extend soft loans with indicative terms and conditions to priority sectors in Sri Lanka. The Department of External Resources pointed out the necessity to have further discussion on the proposed terms and conditions of the loans, such as procurement of at least 50% of goods and services from the Thailand and also highlighted the present challenges emanating from the ongoing debt restructuring process of Sri Lanka.

Further, ERD emphasized the importance of obtaining NEDA support in terms of investment & projects in the PPP modality. It was agreed to discuss these matters in depth in the coming months. Additionally, Director General of Department of National Planning explained the strategic direction of public investments in Sri Lanka. Last but not least, DG, ERD reiterated the importance of continuing these partnership and the commitment of the Government of Sri Lanka to foster and sustain such relationships which will derive mutual benefits for both parties.

Further, Government of Sri Lanka is closely working with the Thailand International Cooperation Agency (TICA) at present with regard to the Two Year Implementation Plan between Thailand and Sri Lanka for 2023 – 2024 for the priority sectors such as Community Based Tourism, small industries development, marine ornamental fish breeding and capacity building programmes for Government officials in Sri Lanka.

WhatsApp Image 2024-04-11 at 10.38.08


Department of External Resources
Ministry of Finance, Economic Stabilization and National Policies
Colombo 01
On April 10, 2024.


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

IMG-20240107-WA0004     DSC08109


The Japan-Sri  Lanka  Economic  Cooperation   Policy  Dialogue   - 2024 was held on January  05, 2024, at the Ministry of Finance in Colombo. The forum was in order to exchange views on matters pertaining to the Japanese-funded project portfolio, explore future developments,    and  prospective economic   cooperation   between Japan  and Sri Lanka  going forward.   The Japanese   delegation   was led  by Mr. Endo Kazuya,    Director-General,     International    Cooperation   Bureau,   Ministry   of Foreign Affairs   of Japan.    Mr. K. M.  Mahinda  Siriwardana,    Secretary,  Ministry   of Finance, Economic  Stabilization     and  National     Policies    and  Mr. Endo  Kazuya,  Director    - General,    Co-Chaired    the meeting  along   with   both relevant   government   officials.

At   the  discussion,     Secretary,    Ministry    of  Finance,   Economic   Stabilization     and National  Policies  expressed  his  warm  gratitude  and appreciation   for the continuous support   extended   by  the  Government    of Japan   towards  Sri   Lanka  throughout history.    He  made  special    reference   to Japan's   recent  assistance   across  a  broad spectrum    of  initiatives,     including    the  debt  restructuring    process,   and   the  IMF supported      macroeconomic     reform    programme,     which      have    been    crucial components   of Sri  Lanka's  ongoing  recovery  from its worst economic crisis  in post• independence   history. 

The Secretary also explained   the implementation    status of various macroeconomic reforms   and the debt   restructuring     process.   He emphasized   Sri Lanka’s   firm commitment   to ensure comparability   of treatment   between  all  holders  of external debt   from   the   outset   of  this   process.   The   Secretary    reiterated    Sri  Lanka's commitment to implementation    of governance   related  reforms,  underpinned  by a number  of ongoing  legislative   and institutional  measures.

In Response,  DG Endo  expressed  his appreciation    for Sri Lanka's  efforts to recover from   the  economic   crisis  and   shared   his  expectations    of  a  speedy   recovery. Furthermore,    he  outlined   his  appreciation    of  the  government's   commitment   on continuing   the  economic   reforms  supported    by  the IMF programme.   DG Endo reiterated  the importance   of the early completion   of signing  of a Memorandum   of Understanding     (MoU)    on   debt   restructuring     between    the   Official    Creditor Committee  (OCC)  and  the Sri  Lankan  government,   as well  as the need  to ensure transparency   and comparability     in agreements   with creditors   outside  the OCC.

The two sides also exchanged views   on Japan's   future   economic cooperation  with Sri Lanka,   including    the  existing   Yen  loan  projects,  to stabilize   and  reinforce  Sri Lanka's   economy   as  well  as  overcome   its  socio-economic challenges.    DG Endo stated   that Japan  will  continue   to provide  support  to the people  of Sri Lanka to help the country   fully  recover  from the economic  crisis   as soon  as possible   and return  to a path of progressive   development.Mr.  Siriwardana    requested   future   cooperation    from  the  Goverrnnent   of Japan including   the existing    Yen  loan  projects as a catalyst  to attract  further  investment, along  with  technical   and financial   support   for the  ongoing   reforms associated    with the  IMF  programe.    He further   outlined    the investment    climate   that Sri   Lanka intends   to build   and   invited    Japanese    investors    to   actively    evaluate    potential investments in Sri Lanka.


Ministry of Finance, Economic   Stabilization     and National   Policies
Colombo   01
On January   05, 2024




Provision of Japanese Yen One Thousand and Six Hundred Million The Government of Japan, as one of our main development partners, provides concessional loans and various grant aid schemes such as Economic and Social Development Programs, Technical Cooperation, Research Partnerships, Development Studies, and non-project grant aid with a view to improving the socio-economic status by strengthening bilateral relations between the two countries.

During the present economic crisis in Sri Lanka, the government of Japan has extended its cooperation by providing required immediate humanitarian assistance for the affected community as well as by equipping the public sector, aiming to improve the socioeconomic situation in the country.

At this juncture, 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, fishing, health care, and vocational training.

Under this grant assistance 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; portable ultrasonic scanners, gynecological examination tables, a laparoscopic system, mammography, fetal heart rates, and infant warmers for improving the maternal and pediatric care in major hospitals in Northern Province; industrial sewing machines, zigzag (industrial) machines, overlock (5 thread) machines, and button holder (5 thread, industrial) machines for dressmaker courses at vocational training centers in Northern Province; and a petrol boat, a rigid-hull inflatable boat, lighted buoys, and HG radio Transceivers will be provided for the project of ensure the safety of fishermen will be provided.

The Exchange of Notes pertaining to the above grant was 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 on March 18, 2024, at the Ministry of Finance, Economic Stabilization, and National Policies. His Excellency the Ambassador of Japan in Sri Lanka, Mr. MIZUKOSHI Hideaki signed the Exchange of Notes on behalf of the Government of Japan.

Ministry of Finance, Economic Stabilization and National Policies
Colombo 01
On March 18, 2024.




The Government of Sri Lanka is planning to borrow USD 500 million from the International Development Association (IDA) of the World Bank Group in 2023 to finance the implementation of Sri Lanka First Programmatic Resilience, Stability and Economic Turnaround (RESET), Development Policy Operation (DPO) Program.

The DPO is a two-year program from 2023-2024. USD 500 million will be provided under this program in two equal tranches to support the Government of Sri Lanka’s foundational reform plan. This plan aims to restore stability through macroeconomic adjustments in the short run, help the poor and vulnerable cope with the current shock, and address structural causes of the current economic crisis to help restart growth. The DPO’s first tranche of USD 250 million will be available for disbursement upon the effectiveness of the operation after World Bank Board approval on 28th June 2023. The second tranche will be available in October 2023 subject to the enactment of the Banking (Special Provisions) Act, acceptable progress in carrying out the program, and continued adequacy of the macroeconomic policy framework.

The DPO program seeks to address some of the root causes of the economic crisis and introduce measures to avoid a repetition of such a crisis through three pillars: (i) improving economic governance to strengthen fiscal discipline, transparency, and accountability of fiscal and public resource management and safeguard financial stability; (ii) enhancing growth and competitiveness to unlock Sri Lanka’s growth potential through a more vibrant and competitive private sector; and (iii) protecting the poor and vulnerable from the fallout of the crisis.

The relevant Loan Agreement for the Sri Lanka Resilience, Stability and Economic Turnaround (RESET), Development Policy Operation (DPO), amounting to USD 500 million was signed by Mr. A.K. Seneviratne, Deputy Secretary to the Treasury, and Mr. Faris H.Hadad-Zervos, Country Director, on 29th June 2023 on behalf of the Government of Sri Lanka and IDA, respectively.

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