The Sri Lanka Infrastructure Bond could be a game-changer for post-Ditwah recovery, according to First Capital CEO Dilshan Wirasekara. With initial economic costs estimated at 1–3% of GDP, innovative capital-market solutions are crucial to rebuild infrastructure, agriculture, and businesses.
Sri Lanka infrastructure bond proposed to finance Cyclone Ditwah reconstruction
Cyclone Ditwah has caused unprecedented economic damage to Sri Lanka, with initial estimates ranging from $200 million to $2.9 billion. First Capital Holdings PLC Managing Director and CEO Dilshan Wirasekara emphasized that the final economic toll is likely to reach 1–3% of GDP, highlighting the urgent need for robust financial interventions.
Speaking during a corporate finance panel, Wirasekara stressed that traditional disaster response methods, such as those used during the 2004 tsunami or the 2016 floods, would be insufficient. “This is a massive undertaking. We must think out of the box,” he said. He identified three major impact areas demanding immediate attention: infrastructure damage, agricultural losses and supply chain disruptions, and human costs, including loss of life and community-level hardship.
To address these challenges, Wirasekara urged both the public and private sectors to explore new capital-raising mechanisms. A large-scale, government-backed Infrastructure Bond could provide the critical funding needed for reconstruction while supporting distressed enterprises in need of restructuring or fresh capital.
“The Colombo Stock Exchange (CSE) and the Securities and Exchange Commission (SEC) have introduced more new financial products over the past 24 months than ever before, especially in debt instruments. The ongoing disaster presents a compelling case to deploy these mechanisms at scale,” Wirasekara said. He suggested that the proposed Infrastructure Bond should target both domestic and international investors to maximize capital availability.
The CEO highlighted the Cabinet-approved ‘Rebuild Sri Lanka Fund’ as an ideal platform to launch this bond. With Sri Lanka still largely excluded from international capital markets, domestic funding has been stretched to cover budget deficits through rupee-denominated debt, leaving limited room for post-disaster reconstruction.
Given the magnitude of the damage, Wirasekara stressed that typical corporate debt issuances of $5–10 million are insufficient. He proposed a minimum initial bond issuance of $30–40 million, potentially scaling up to $500 million, and urged investment banks to participate at zero fee to prioritize national recovery over commercial returns.
To attract investors, the Infrastructure Bond could be issued at a slightly negative premium compared to prevailing government securities yields of 8–11%. This approach would appeal to patriotic domestic investors while also enticing foreign institutions seeking to support Sri Lanka’s recovery efforts. Complementary foreign aid and donations could further bolster the funding pool.
Wirasekara also noted that while the CSE had announced an Infrastructure Bond framework last year, no issuance has yet taken place. “The current crisis is the strongest justification to activate this mechanism immediately to fill the country’s funding gap and accelerate rebuilding efforts,” he added.
Experts suggest that the bond could serve as a blueprint for future disaster-response financing in Sri Lanka, combining structured capital-market instruments with government backing and private-sector collaboration. By deploying this innovative funding strategy, the country could address immediate reconstruction needs, stabilize affected industries, and ensure long-term resilience against future natural disasters.
Implementing the proposed Infrastructure Bond will require coordinated efforts from policymakers, investors, and financial institutions. The bond’s success depends on transparent governance, credible oversight, and clear communication with domestic and international investors. If executed effectively, this initiative could position Sri Lanka as a pioneer in leveraging capital markets for national disaster recovery, offering a replicable model for other emerging economies facing similar challenges.
In conclusion, the Sri Lanka Infrastructure Bond represents more than a financing tool; it symbolizes a strategic and collaborative approach to national recovery. With estimated costs reaching up to 3% of GDP, innovative capital-market solutions are not optional but essential for rebuilding the nation, restoring livelihoods, and accelerating economic resilience after Cyclone Ditwah.