The Cabinet of Ministers has approved a proposal by President Anura Kumara Dissanayake, in his capacity as Minister of Finance, to obtain a concessional loan of USD 200 million from the Asian Development Bank (ADB).

The approval follows Cabinet consent on 15 June 2026 to conduct loan agreement discussions under Sub‑Programme 1 of the ADB’s Trade, Investment and Industrial Development Programme, which have now been successfully concluded.

Clearances for the loan have been received from the Attorney General’s Department and the Central Bank of Sri Lanka, with the arrangement subject to conditions set by the State Debt Management Office.

The loan is expected to support ongoing economic development initiatives while strengthening trade and investment programmes. (Newswire)

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Opposition Leader Sajith Premadasa has alleged that the country’s financial security is at risk following reports that USD 2.5 million meant for a foreign debt repayment was diverted to a hacker through fraudulent instructions.

Speaking to the media in Kataragama today, Premadasa said the reported loss occurred during the repayment of a foreign loan instalment and raised serious concerns over the government’s financial management systems.

He claimed that the funds had allegedly been obtained by a hacker through false information and questioned how such a transaction could have taken place without proper verification.

Premadasa said the incident suggested that the Ministry of Finance, Treasury, and Central Bank of Sri Lanka lacked the ability to properly manage the country’s financial operations.

He warned that if foreign currency reserves could be lost through forged confirmations and fraudulent instructions, the nation’s financial security was under threat.

The Opposition Leader further said the matter had created a broader national security concern, citing weaknesses in the country’s financial systems.

He questioned whether relevant institutions, including the State Debt Management Office, Department of Foreign Resources, Treasury, Finance Ministry, and Central Bank, had established adequate procedures to process such payments.

Calling the matter serious, Premadasa urged authorities to launch an independent and transparent investigation to determine how the funds were allegedly misdirected and whether due verification procedures had been ignored.

He said those responsible must be identified through an impartial probe. (Newswire)

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The Cabinet of Ministers has approved the expansion of Sri Lanka’s disaster relief loan program to cover all categories of entrepreneurs, including large-scale businesses.

Under the new scheme, micro-entrepreneurs will be eligible for up to Rs. 250,000, small-scale businesses up to Rs. 1 million.

Medium to large-scale entrepreneurs can obtain up to Rs. 25 million, all at an annual interest rate of 3%. The repayment period is three years, including a six-month grace period.

The decision builds on the previously approved ‘RE-MSME’ loan scheme, which provided concessional working capital loans to micro, small, and medium-scale enterprises affected by recent disasters.

Unlike the initial phase which involved state banks, the extended scheme will now include licensed commercial and specialized banks to increase reach and impact. The government has allocated Rs. 5 billion for the initiative, the Cabinet spokesperson said.

The proposal was submitted by President Anura Kumara Dissanayake in his capacity as Minister of Finance, Policy Planning, and Economic Development. (Newswire)

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The Government of Sri Lanka and the Asian Development Bank (ADB) have signed a loan agreement of USD 90 million for phase 5 of the Second Integrated Road Investment Program (iROAD 2). 

According to a statement from the Ministry of Finance, the loan agreement has been signed after the government successfully concluded discussions with the ADB. 

The objective of this program is to enhance road transport efficiency by improving connectivity between selected rural communities and key socio-economic centres, while also strengthening the institutional capacity of national road agencies.

According to the ADB, the loan will support the upgrading of approximately 500 kilometres of rural access roads that are inclusive and accessible to elderly persons, women, children, and persons with disabilities, and will be developed in accordance with climate- and weather-resilient standards.

In addition, the program will facilitate the rehabilitation of around 21 kilometres of national roads and the maintenance of approximately 100 kilometres of rural access roads.

The Ministry of Transport, Highways, and Urban Development will serve as the executing agency, while the Road Development Authority (RDA) will act as the implementing agency.

The loan agreement was formally signed today at the General Treasury in Colombo, by Secretary to the Ministry of Finance Harsha Suriyapperuma on behalf of the Government of Sri Lanka and ADB’s Country Director for Sri Lanka, Takafumi Kadono. (Newswire)

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Sri Lanka has signed an agreement with the Asian Development Bank (ADB) to borrow 100 million US dollars to develop the health sector.

According to the Ministry of Finance, the agreement was signed by Secretary to the Ministry of Finance, Harshana Suriyapperuma, for Sri Lanka and the Country Director for the Asian Development Bank, Takafumi Kadono. 

The loan is given from ADB’s Ordinary Capital Resources window and will support the national strategic framework for the development of health services for improved efficiency and quality of secondary health services as first referral care for ensuring universal health coverage. 

The Ministry further stated that the package also includes an externally financed grant amounting to 6.9 million dollars from the Pandemic Fund, provided under Result-based Lending. (Newswire)

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The Central Bank has issued a new directive under the Central Bank Act, revising loan-to-value (LTV) ratios for vehicle financing, effective from July 17, 2025.

The changes are intended to enhance macroprudential policy making, mitigate systemic risks, and harmonize existing credit limits, the Central Bank said in a statement.

Under the new directive, the previously higher 90 percent LTV ceiling for electric vehicles has been removed.

The LTV ratio for cars, sport utility vehicles (SUVs), and vans has been increased to 60 percent from the previous 50 percent.

For three-wheelers, the LTV ratio has doubled, rising from 25 percent to 50 percent.

Vehicles used for taxi services or similar commercial purposes are now capped at 70 percent.

Meanwhile, the LTV ratio for commercial vehicles has been reduced to 80 percent from the earlier 90 percent.

Additionally, cars that have been registered and in use within Sri Lanka for more than one year are now subject to a 70 percent LTV cap. (Newswire)

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The Ministry of Finance has announced that a concessionary Pledge Loan Scheme for SME paddy millers and cooperatives will launch on July 1, 2025.

According to the Finance Ministry,  the Pledge Loan Scheme is being implemented to support Yala season paddy purchases. 

Loans up to Rs. 50 million will be available at 7% annual interest, repayable within 180 days, the Finance Ministry added. (Newswire)

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A 31-year-old woman wanted for financially defrauding Rs. 4.5 million from the public has been arrested in Hatton.

According to the Police, the Hatton Magistrate’s Court had issued a warrant on the woman. 

The suspect, a 31-year-old resident of Badulla, was arrested near the Hatton Railway Station yesterday.

The woman is accused of financially defrauding the public in various areas by promoting low interest rates for loans on social media. (Newswire)

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The Asian Development Bank (ADB) signed an agreement with the Ceylon Electricity Board (CEB) on Thursday to provide US$ 150 million for transmission projects in Sri Lanka.

According to a CEB statement, after rigorous due diligence by the ADB on the technical, economic and social merits of the CEB’s upcoming investment proposals, the ADB approved the loan package in November 2024. 

Through these funds, several essential projects in the CEB’s long-term transmission plan will be implemented over 2025-2027, which will improve the overall reliability and stability of the grid. 

Transmission assets built through this loan will enable the integration of planned large-scale renewable energy developments into the national grid. 

The financing will support the following;

• Construction of 6 new grid substations
• Construction of 87 km of 132 kV transmission lines 
• Construction of 45 km of 220 kV transmission lines 
• Augmentation of 2 existing grid substations 

The CEB and its distribution subsidiary Lanka Electricity Company (LECO), serve over 7.5 million electricity customers, through the CEB’s transmission network comprising 3400 km of high voltage lines and 90 grid substations. (Newswire)

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The OPEC Fund for International Development has agreed to provide a loan of USD 50 million as a policy-based loan to Sri Lanka, Cabinet Spokesman Minister Nalinda Jayatissa announced.

Addressing the media today, Minister Jayatissa said that the government had submitted a request to the OPEC Fund to secure funds to finance Sri Lanka’s Comprehensive Reform Agenda.

The minister said the request was made in line with the parameters of the Extended Fund Facility (EFF) implemented with the assistance of the International Monetary Fund (IMF).

Accordingly, the Cabinet has approved the proposal submitted by the President, in his capacity as the Minister of Finance, to enter into a loan agreement with the OPEC Fund for International Development to obtain the said loan. (Newswire)

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The Asian Development Bank (ADB) has approved a $200 million loan to upgrade Sri Lanka’s power sector infrastructure, enhancing the reliability of transmission and distribution networks and facilitating greater integration of renewable energy.

Issuing a statement, the ADB said of the total amount, US$150 million will be provided to the Ceylon Electricity Board (CEB) and US$50 million will go to the Lanka Electric Company (LECO) adding that both financing will be guaranteed by the Democratic Socialist Republic of Sri Lanka.

“Driving power sector reforms, combined with targeted infrastructure interventions, is essential to facilitate competitive renewable energy development and reduce power generation costs,” said ADB Country Director for Sri Lanka Takafumi Kadono. “By expanding and modernizing infrastructure and incorporating digitalization solutions, this project will support the government’s goal of increased integration of renewable energy in the electricity mix, reduce power interruptions, and minimize transmission and distribution losses.

Sri Lanka achieved 100% household electrification in 2016. Peak demand reached around 2,800 megawatts (MW) in 2023, including contributions from distributed renewable energy, and is projected to grow significantly by 2030. While Sri Lanka’s total installed power generation capacity reached 5,191 MW in 2023, about 50% of the country’s electricity generation in 2023 came from thermal power plants, underscoring the challenges in transitioning to a more sustainable energy mix. In its updated nationally determined contribution, the government has set an ambitious target of 70% electricity generation from renewables by 2030 and carbon neutrality in electricity generation by 2050.

The Power System Strengthening and Renewable Energy Integration Project will enhance climate resilience and expand the capacity of transmission and distribution networks, enabling greater integration of renewable energy. The project will expand the 220-kilovolt and 132-kilovolt transmission infrastructure with new transmission lines and substations, modernize the medium voltage distribution network, and upgrade grid protection systems. The project will introduce Sri Lanka’s first grid-scale battery energy storage system at the transmission level, establish a renewable energy center to forecast and monitor renewable energy generation, and implement network automation systems with SCADA and remote terminal units, providing operators with real-time data and alerts to ensure efficient power delivery.

The approval of this project reflects the significant progress made by Sri Lanka in advancing power sector reforms, which aims to enhance financial sustainability, ensure cost recovery tariff revisions, and competitive renewable energy development. ADB’s support for infrastructure upgrades is contingent on these reforms, recognizing their critical role in renewable energy integration and improving the sector’s overall performance.

The project will strengthen the institutional capacities of the Ceylon Electricity Board (CEB) and Lanka Electric Company (LECO)—the only utilities in the country responsible for power delivery to end-consumers. The project will improve their ability to integrate and manage renewable energy systems, adopt digital solutions, and enhance hosting capacity of rooftop solar installations. 

Various career development activities for CEB and LECO female staff, awareness-raising programs on safe and productive use of electricity, and training on adopting clean energy solutions for women-led groups and businesses will be implemented. 

The ADB added that it is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region. (Newswire)

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Sri Lanka’s dollar bonds and stocks slid as leftist candidate Anura Kumara Dissanayake’s victory at the presidential election puts the nation’s bailout by the International Monetary Fund and debt deals at peril.

Bonds maturing in March 2029 declined 3.1 cents, the biggest drop in about two years, to 50.2 cents on the dollar on Monday. The S&P Sri Lanka 20 Index of blue-chip stocks slid 2% in early trading. The rupee traded steady.

Dissanayake has vowed to reopen negotiations with the IMF over its $3 billion bailout, which comes with spending cuts and tax hikes that proved deeply unpopular with voters.

Read more; https://www.bloomberg.com/news/articles/2024-09-23/sri-lanka-bonds-tumble-as-leftist-candidate-wins-presidency (Bloomberg)

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A new loan scheme with a subsidized interest rate of 7% has been introduced for small and medium enterprises (SMEs), State Finance Minister Ranjith Siyambalapitiya said.

Based on a loan from the Asian Development Bank, the new scheme has an allocation of Rs.50 billion, launched with the view of strengthening small and medium enterprises, he said. 

The Minister made these comments while addressing a media briefing held at the Presidential Media Centre. 

Under this scheme, small and medium enterprises can receive loans up to a maximum of Rs.10 million. 

Additionally, Rs.6 billion will be allocated for the development of small tea gardens, and Rs.2 billion will be designated for women entrepreneurs, the Minister said. 

The Minister revealed these details, commenting on the positive steps taken by the Government in its economic recovery efforts. 

In March this year, the ADB approved a $100 million loan to provide SMEs in Sri Lanka more access to finance and build their resilience to external shocks, such as the economic crisis and climate change. (Newswire)

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Cabinet approval has been granted to take the necessary measures to receive Japanese Yen 1,600 million as grants under the Japanese Economic and Social Development Programme for several development projects in Sri Lanka. 

The Japanese Government has expanded its corporation to grant immediate humanitarian grants to the communities devastated by the present economic crisis prevailing within Sri Lanka and by empowering the government sector to upgrade the economic situation of the country. 

Accordingly, the Government of Japan has agreed to grant approximately Rs. 3.3 billion to implement the following projects under the Japanese Economic and Social Development Programme. 

• Response and management enhancement project for oil spills of Sri Lanka Coastal Defense Force. 
• The project to supply assisting equipment for maternal and infant treatments in the main hospitals of the Northern province.
• The project to distribute assisting equipment for garment courses in vocational training centres of the Northern province. 
• Project to award assisting equipment for the security of fishermen in Northern and Eastern provinces.

Accordingly, the Cabinet approved the proposal presented by the President, in his capacity as the Minister of Finance, to sign the exchange papers and other relevant documents with the Government of Japan to receive donation grants under the Japanese Economic and Social Development Programme for the implementation of the said projects. (NewsWire) 

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The loan agreement for the policy-based lending for subprogram-1 of the Asian Development Bank’s US$ 200 million loan for the Financial Sector Stability and Reform Program of Sri Lanka has been signed. 

A Finance Ministry statement said the agreement was signed by Finance Ministry Secretary Mahinda Siriwardana and Country Director of ADB Sri Lanka Residence Mission, Takafumi Kadono. 

The Ministry said that as the relevant agencies have successfully achieved all pre-policy actions related to subprogram-1, the entire US$ 200 million loan proceeds relevant to subprogram -1 will soon be disbursed to the Treasury.

The loan will be provided from ADB’s Concessionary Ordinary Capital Resources with a 25-year term, including a 5-year grace period, and an interest rate of 2.0% per year.

Full statement: 

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The Asian Development Bank (ADB) has approved a US$ 200 million concessional loan to the Government of Sri Lanka.

The ADB announced that the loan has been approved to help stabilize Sri Lanka’s finance sector.

Providing further details on the loan, the ADB said the Financial Sector Stability and Reforms Programme comprises two subprogrammes of US$ 100 million each.

The loan is accompanied by a US$ 1 million grant from the ADB’s Technical Assistance Special Fund, it added. (NewsWire)

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Cabinet approval has been given to enter into the relevant agreement concerning the World Bank-funded Financial Sector Safety Net Strengthening Project. 

The government said at the Cabinet meeting held in April 2023, policy approval of the Cabinet was given for the implementation of the project to strengthen the safety net of the financial sector under World Bank funds. 

The World Bank had agreed to provide a loan amount of US$ 150 million during the loan agreement negotiations held according to this approval. 

As per the agreement, the loan will be given under the components of Capitalization of the Sri Lanka Deposit Insurance Scheme, Institutional Capacity Development of the Central Bank and Supervision of the implementation of that project. 

Accordingly, the Cabinet approved the proposal presented by the President, in his capacity as the Minister of Finance, to enter into the respective agreements concerning the project. (NewsWire)

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The Cabinet of Ministers has approved a proposal to enter into an agreement with the Asian Development Bank (ADB) to obtain the first tranche of US$ 200 million of a US$ 400 million loan facility under the Economic Stabilization and Reformation Programme. 

According to the government, initial discussions with the ADB were held by the Sri Lankan Government to obtain 02 loan facilities worth US dollars 200 million each based on policies to implement 02 sub – programmes under the economic stabilization and reformation programme. 

It has been proposed to implement accelerated reformations to enhance the conflict management framework and the stabilization in the finance sector under the first sub – programme.

Meanwhile, it has been proposed to develop an all – inclusive resistant finance system under the second sub – programme. 

The Cabinet has granted approval to the proposal submitted by President Ranil Wickremesinghe in his capacity as the Minister of Finance, to enter into a loan agreement with the Asian Development Bank in this regard.

It has been proposed to obtain an amount of US dollars 200 million subject to an annual interest rate of 2% with a repaying period of 25 years inclusive of a grace period of 05 years in relation to the first sub – programme. (NewsWire)

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Sri Lanka has paid another $100 million in the second instalment out of a $200 million loan given by Bangladesh in a currency swap, a Bangladesh Bank spokesperson said on Friday.

According to Bangladeshi Media, last month, Colombo paid $50 million in the first instalment of the loan repayment.

Bangladesh lent $200 million from its foreign exchange reserves to Sri Lanka during its economic crisis.

With the latest instalment, the Island nation paid back a total of $150 million, according to Md Mezbaul Haque, the central bank’s spokesman.

Mesbaul Haque added that the remaining $50 million is due to be repaid within the current year.

“We are hopeful that the rest of the amount will be cleared by September,” said Haque.

The repayment comes more than a year and a half after the original agreed date. Sri Lanka and Bangladesh entered into the currency swap agreements in August 2021.

Bangladesh extended the debt repayment time to give Sri Lanka time to revive its economy. (NewsWire)

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Sri Lanka will settle the USD 200 Million loan from Bangladesh this year, Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe said on Thursday (June 01).

According to the Central Bank Governor, Sri Lanka is expected to settle the loan from Bangladesh in August or September.

In April 2023, Bangladesh extended the repayment period of Sri Lanka’s $200 million loan it had given, by six more months.

The extension was granted after the Sri Lankan Central Bank sought time from Bangladesh to make the first instalment of the $200 million credit by March this year, hoping that it would be able to restructure its debt by then.

Speaking at the 2023 Spring Meetings of the World Bank Group and the International Monetary Fund (IMF) in Washington, Bangladesh Bank Governor Abdur Rouf Talukder revealed at the time that Sri Lanka sought six more months for the repayment.

Talukder further elaborated that Sri Lanka had agreed to make its first instalment by August this year and another instalment by September.

Sri Lanka currently is engaged in debt restructuring after facing its worst economic crisis since independence in 1948. 

Dr. Weerasinghe assured today that Sri Lanka will settle the USD 200 Million loan from Bangladesh this year as agreed. (NewsWire)

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