World Bank backs Sri Lanka’s reforms with $150 m to drive growth after approving new financing to support the Government’s reform agenda aimed at attracting investment, strengthening competitiveness and creating sustainable employment opportunities.
World Bank backs Sri Lanka’s reforms with $150 m to drive growth and investment
The World Bank’s Board of Executive Directors has approved US$150 million under the Sri Lanka Reforms for Growth, Resilience and Openness Development Policy Operation (REGROW DPO), marking the first of a proposed three-operation programme designed to support the country’s transition from economic stabilisation to long-term growth.
According to the World Bank, the REGROW Development Policy Operation builds on the earlier Resilience, Stability and Economic Turnaround (RESET) DPO programme. While the RESET series focused on restoring macroeconomic stability during the country’s economic crisis, the new initiative shifts attention towards reforms that promote investment, productivity and long-term economic resilience.
The financing will provide budget support linked to policy reforms that seek to strengthen Sri Lanka reforms in several key areas. These include reducing trade barriers, improving the investment climate, strengthening the financial sector and enhancing the competitiveness of key industries.
The operation also supports reforms aimed at expanding women’s participation in the workforce, improving the governance and operational performance of State-owned enterprises (SOEs), and increasing efficiency in the power sector to deliver better services while lowering energy costs.
The World Bank said the programme is designed to strengthen economic governance and improve competitiveness, creating conditions for stronger private sector growth and higher levels of investment.
Commenting on the approval, World Bank Group Country Manager for Sri Lanka Gevorg Sargsyan said the country had made substantial progress in restoring macroeconomic stability and should now focus on reforms that encourage investment and job creation.
“Sri Lanka has made significant progress in stabilising its economy, and now it is critical to advance reforms that can unlock private investment, facilitate high-value exports, and create jobs,” Sargsyan said.
He added that the REGROW programme would help accelerate Sri Lanka’s transition towards a more competitive, transparent and resilient economy.
“The REGROW DPO supports the transition to a more competitive, transparent, and resilient economy—one that can deliver sustainable and inclusive growth for all Sri Lankans,” he said.
The World Bank noted that generating more and better employment opportunities remains central to its global development strategy, with job creation viewed as a key pathway to reducing poverty and expanding economic opportunities.
Sri Lanka has maintained a development partnership with the World Bank for more than 70 years. The institution currently supports 13 active projects across the country with a combined value exceeding US$1.5 billion, covering sectors such as education, healthcare, energy, transport, agriculture and social protection.
In addition, the International Finance Corporation (IFC), the World Bank Group’s private sector arm, has committed nearly US$1.8 billion in long-term and short-term financing to Sri Lanka’s private sector between 2021 and 2026, reinforcing efforts to expand investment, strengthen businesses and support economic recovery.
The World Bank backs Sri Lanka’s reforms with $150 m to drive growth initiative represents another significant milestone in the country’s ongoing reform programme, with policymakers aiming to create a stronger investment climate, promote private sector growth, expand exports and deliver sustainable economic development over the coming years.