Press Releases
Implementation of the Power System Strengthening and Renewable Energy Integration Project and the Energy Activities Support Facility (Small Expenditure Financing Facility) under the loan assistance of USD 230 million from Asian Development Bank
The Government of Sri Lanka had discussions with the Asian Development Bank to mobilize two project loans amounting to USD 230 million for the Implementation of the Power System Strengthening and Renewable Energy Integration Project and the Energy Activities Support Facility (Small Expenditure Financing Facility).
Out of the two loans mentioned above, a loan of USD 200 million under the Ordinary Capital Resources of ADB will be obtained to improve power supply efficiency and reliability under the Power System Strengthening and Renewable Energy Integration Project. It will mainly focus on strengthening and modernizing of climate-resilient transmission and distribution network to facilitate renewable integration and improving institutional capacity of power utilities, including enhanced renewable energy integration and grid management capabilities.
Further, a loan of USD 30 million will be obtained in two tranches of USD 15 million each under the Concessional Ordinary Capital Resources to complete the construction and post-construction activities of the Moragolla Hydropower Project under first tranche. The second tranche will be obtained later to implement the projects aimed to complement the renewable energy development.
The Ministry of Finance, Planning and Economic Development will issue two separate Treasury Guarantees for the above-mentioned loans. The Ceylon Electricity Board and the Lanka Electricity Company (Private) Limited will be the Executing and the Implementing Agencies of the Power System Strengthening and Renewable Energy Integration Project, and theCeylon Electricity Board will be the Executing and the Implementing Agency of the Energy Activities Support Facility (Small Expenditure Financing Facility).
The two separate Guarantee Agreements pertaining to the above-mentioned loans were signed on December 19, 2024 between the Government of Sri Lanka and the Asian Development Bank at the Treasury in Colombo by Mr. K. M. Mahinda Siriwardana, 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 while the Loan Agreements were signed by the Ceylon Electricity Board and the Lanka Electricity Company (Private) Limited with the Asian Development Bank relevant to each loan.
Department of External Resources
Ministry of Finance, Planning and Economic Development
19 December 2024
Asian Development Bank provides 2nd Policy-Based Lending of USD 200 million for the Financial Sector Stability and Reform Program - Subprogram 2.
As the result of discussions between the Asian Development Bank (ADB) and the Government of Sri Lanka, Two policy-based loans (PBL) have been developed to implement the Financial Sector Stability and Reform Program in order to create a stable financial system that provides access to finance for businesses in various sectors of the economy.
The program adopts a programmatic modality with two subprograms of USD 200 million each. It will support implementing multi-year policy reforms, including immediate reforms to enhance the crisis management regulatory framework and stabilize the financial sector under Subprogram 01 and reforms to build a resilient and inclusive financial system under Subprogram 02.
Under the above program, the first PBL of USD 200 million was fully disbursed in December 2023, following the successful completion of all required prior policy actions under Subprogram 01 of the program. Since the relevant agencies have also successfully achieved all pre-policy actions related to Subprogram 02, the relevant entire USD 200 million loan proceeds will soon be disbursed to the Treasury. The loans provide under ADB concessionary Ordinary Capital Resources with a 25-year term, including a 5-year grace period, and an interest rate of 2.0% per year.
The Ministry of Finance, Planning and Economic Development will be the executing agency of the above program and implemented the policy actions in collaboration with the Central Bank of Sri Lanka and other relevant institutions.
Today, the loan agreement for policy-based lending for Subprogram 02 was signed between the Government of Sri Lanka and the Asian Development Bank at the Treasury in Colombo. Mr. K. M. Mahinda Siriwardana, Secretary, Ministry of Finance, Planning and Economic Development and Mr. Takafumi Kadono, Country Director, ADB Sri Lanka Residence Mission, placed signatures on behalf of the Government of Sri Lanka and the Asian Development Bank respectively.
Department of External Resources Ministry of Finance, Planning and Economic Development 27 November 2024
Signing of Record of Discussion (RoD) between the Neighbouring Countries Economic Development Cooperation Agency (NEDA) of the Kingdom of Thailand, and Ministry of Finance, Economic Stabilization and National Polices for the Capacity Building Programme fo
In response to an invitation made by the Department of External Resources, Ministry of Finance, Economic Stabilization and National Policies, a delegation from Neighbouring Countries Economic Development Cooperation Agency (NEDA) headed by Mr. Perames Vudthitornetiraks, President of NEDA & comprising Mr. Rappipat Promnart, Director of Policy and Planning Bureau, Mr. Wasit Anuntavichien, Policy Planning Analyst visited Sri Lanka and met Mr. K. M. Mahinda Siriwardana, Secretary to the Treasury and signed a Record of Discussion (RoD) today, in the presence of H.E. Mr. Paitoon Mahapannaporn, Ambassador to Thailand in Sri Lanka, to provide technical assistance from NEDA to enhance the capacities of the officers to be attached to the Public Debt Management Office ( PDMO), which is going to be established at the end of this year. The training of 20 - 25 officials, will take place in October 2024 in Thailand, and the cost will be borne by the NEDA.
During the meeting, which took place subsequent to the signing ceremony, the Secretary to the Treasury recalled the recent economic crisis faced by the Country and indicated the fiscal and monetary policy initiatives took by the Government which led the country to recover to a greater extent during a short period of time and the envisaged programme of the Government to ensure that, Sri Lanka does not face a similar crisis in the future. Further, he commented on the longstanding cultural ties between Thailand Sri Lanka, which has a long and cordial history, grounded in shared cultural and religious ties, particularly through Theravada Buddhism and the potential for future development cooperation between the two countries. Further, Mr. Ajith Abeysekera, Director General of Department of External Resources, also extended his sincere gratitude for NEDA for coming forward and accepting GoSL’s request to accommodate this training programme to equip and strengthen the capacities of officials who will be attached to the PDMO.
Mr. Perames Vudthitornetiraks, President of NEDA commended the significant progress made so far by the Government of Sri Lanka and insisted that NEDA stands ready to share the experience of their Public Debt Management Office.
Department of External Resources
Ministry of Finance, Economic Stabilization and National Policies
Colombo 01
On July 24, 2024.
Implementation of the Power Sector Reforms and Financial Sustainability Program under the loan assistance of USD 300 million from ADB.
The Government of Sri Lanka had discussions with the Asian Development Bank (ADB) to mobilize three policy-based loans (PBL) amounting to USD 300 million to implement the Power Sector Reforms and Financial Sustainability Program.
The above mentioned Power Sector Reforms and Financial Sustainability Program, consists of three subprograms and a loan of USD 100 million will be mobilized once the policy actions relevant for each of the subprograms are completed. The Program will support the establishment of independent and financially sustainable electricity utilities. Also, it will support streamlined and accelerated development of renewable energy sources for electricity generation under the reform areas.
The Ministry of Finance, Economic Stabilization and National Policies will be the Executing Agency of the above Program and the Ministry of Power and Energy will implement the Program, in collaboration with the Ceylon Electricity Board (CEB), Sri Lanka Sustainable Energy Authority (SLSEA) and Lanka Electricity Company Pvt Ltd (LECO).
Since the relevant agencies have successfully achieved all pre-policy actions related to Subprogram 01, the relevant loan proceeds of USD 100 million will be disbursed to the Treasury once the loan agreement declared effective. The loan will be provided under concessionary terms at a fixed interest rate of 2.0% per year with a repayment period of 25-years, including a 5-year grace period.
The loan agreement for the policy-based lending for Subprogram 01 was signed between the Government of Sri Lanka and the Asian Development Bank on 05 August 2024 at the Treasury in Colombo. Mr. K. M. Mahinda Siriwardana, Secretary, Ministry of Finance, Economic Stabilization and National Policies, and Mr.Takafumi Kadono, Country Director, ADB Sri Lanka Residence Mission, placed the signatures on behalf of the Government of Sri Lanka and the Asian Development Bank, respectively.
Department of External Resources
Ministry of Finance, Economic Stabilization and National Policies
05 August 2024
Official Announcement of the Government of Japan on the Resumption of Disbursement for Japan Funded Project Portfolio
Marking a significant milestone in the official debt treatment process, the Government of Sri Lanka reached the final agreement on its debt treatment with members of the Official Creditor Committee (OCC) of Sri Lanka’s bilateral creditors on June 26, 2024. As a longstanding development partner of Sri Lanka, the Government of Japan supported the initiation of the coordination platform with Sri Lanka’s bilateral creditors, and played a vital role throughout the process of reaching the agreement with the OCC..
The conclusion of the agreement with the OCC, and significant progress in restructuring debt with other creditors, along with the commitment of the Government of Sri Lanka to implement comprehensive macroeconomic reforms supported by the International Monetary Fund and other multilateral partners, has enhanced confidence in the economic stability and debt sustainability of Sri Lanka.
The Government of Japan announced its crucial decision of resuming disbursement for the Japan funded project portfolio of the country, signaling confidence in Sri Lanka’s economic reform programme and renewed optimism regarding the future prospects of the country. With this landmark decision, the suspended projects, including the Bandaranaike International Airport Development Project, utility projects, health sector improvement projects, rural development projects, etc., will be resurrected, paving the way for the economic and social improvement of the country.
The Bandaranaike International Airport Development Project, in particular, is critical for developing Sri Lanka’s connectivity related infrastructure which would be a major boost for key sectors such as tourism, trade, and investment.
The official announcement of Dr. TANAKA Akihiko, President of Japan International Cooperation Agency (JICA) on the resumption of the disbursement was handed over to Mr. K.M. Mahinda Siriwardaena, Secretary to the Treasury and the Ministry of Finance, Economic Stabilization and National Policies, by Ms. IDE Yuri, Senior Representative of the JICA Sri Lanka Office.
Mr. K.M. Mahinda Siriwardaena, Secretary to the Treasury and the Ministry of Finance, Economic Stabilization and National Policies, expressed his sincere gratitude on behalf of the Government of Sri Lanka to the Government of Japan for their pivotal role throughout the debt treatment process and being the foremost decision taker to refinance the ongoing infrastructure development projects.
Ministry of Finance, Economic Stabilization and National Policies
Colombo 01
On July 24, 2024.