World Bank Approves $150 Million to Support Sri Lanka Reforms

The REGROW programme supports measures to reduce trade barriers, improve the investment climate, and strengthen the financial sector to encourage greater private investment.

The World Bank has approved US$150 million in financing to support Sri Lanka's reform programme, helping the country attract investment, improve competitiveness, and create more jobs. The funding comes through the Sri Lanka Reforms for Growth, Resilience and Openness Development Policy Operation (REGROW DPO), the first in a planned series of three operations. It follows the earlier Resilience, Stability and Economic Turnaround (RESET) programme, marking a shift from economic stabilisation towards long-term growth driven by the private sector.

The financing will provide budget support linked to reforms that strengthen economic governance while creating a more competitive business environment capable of supporting sustainable job creation and higher-value economic activity.

Reforms target business climate and employment

The REGROW programme supports measures to reduce trade barriers, improve the investment climate, and strengthen the financial sector to encourage greater private investment. It also includes reforms designed to expand employment opportunities for women, improve the governance and performance of state-owned enterprises, and increase competition in the power sector to deliver more reliable services and lower energy costs for households and businesses.

World Bank Country Manager for Sri Lanka Gevorg Sargsyan said the country has made considerable progress in stabilising its economy and that the next stage of reforms is essential to attract private investment, expand high-value exports, and create more employment opportunities. He added that the programme is intended to help build a more competitive, transparent, and resilient economy that supports inclusive growth.

Long-standing partnership continues

The World Bank has worked with Sri Lanka for more than 70 years and currently supports 13 active projects worth more than US$1.5 billion across sectors including education, healthcare, energy, transport, agriculture, and social protection. Alongside the World Bank's support, the International Finance Corporation (IFC) has committed nearly US$1.8 billion in long- and short-term financing to Sri Lanka's private sector between 2021 and 2026, helping businesses expand investment and generate employment. The REGROW programme is expected to build on these efforts by supporting reforms that strengthen the country's long-term economic resilience and improve opportunities for businesses and workers alike.