Courtesy Hiru News

The World Bank has disbursed the second tranche, amounting to USD 250 million, as part of the USD 500 million Sri Lanka Resilience, Stability and Economic Turnaround (RESET) Development Policy Operation (DPO). This decision comes in recognition of the ongoing satisfactory progress made by the Sri Lankan government in implementing its reform program.

Initiated on June 28, 2023, the RESET DPO, designed to provide crucial budgetary support, represents the first in a series of interventions dedicated to implementing foundational reforms. These reforms aim to reinstate macroeconomic stability, alleviate the impact on vulnerable populations, and foster an inclusive, private sector-driven recovery.

The RESET DPO is a critical initiative aimed at bolstering Sri Lanka’s resilience, stability, and overall economic recovery. The World Bank’s release of the second tranche underscores their confidence in the government’s commitment to the prescribed reforms, which are intended to address economic challenges and pave the way for sustainable development.

The funds are expected to be utilized to support key sectors and initiatives outlined in the RESET program, which includes reforms in areas such as governance, public finance management, and social protection. The financial injection is anticipated to contribute significantly to Sri Lanka’s efforts to strengthen its economic foundations and navigate through challenging global economic conditions.

The World Bank clarified that the release of this financial support is contingent upon the government meeting predefined milestones and completing specific prior actions. The global financial institution emphasized the importance of ongoing economic and structural reforms, citing their critical role not only in stabilizing the economy but also in unlocking its potential for private sector-led growth and transformation.

In a statement, Faris H. Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka, emphasized the significance of the RESET DPO in supporting foundational reforms. These reforms aim to propel the economy toward full recovery, enhance Sri Lanka’s competitiveness, stimulate growth potential, and facilitate private sector investment for inclusive and resilient growth and job creation.

The second tranche follows the release of the initial USD 250 million in June 2023, contingent upon the successful completion of seven reform prior actions spanning three pillars: economic governance, growth and competitiveness, and the protection of the poor and vulnerable. The World Bank has coordinated its efforts with the IMF, ADB, and other development partners to ensure a cohesive and sequenced approach in supporting Sri Lanka’s economic revitalization.