Foreign Minister reveals ADB commits $ 650 m assistance for entirety of 2023
$ 150 m to support power sector reforms
SL seeks technical aid on agriculture, digitalisation, renewable energy, financial sector stability
Govt. requests ADB to progressively downgrade Sri Lanka to have access to concessionary loans
Says meetings with ADB were to secure more technical support till SL overcome economic crisis
By Charumini de Silva in Republic of Korea
The Asian Development Bank (ADB) has reassured its commitment to support Sri Lanka’s ongoing efforts towards recovery from the economic crisis, earmarking $ 2 billion over the next four years, a top Minister said.
“ADB had committed already about $ 2 billion to Sri Lanka for the next four years, with a potential of increasing it further,” Foreign Minister Ali Sabry told the Daily FT on the sidelines of the ADB’s 56th Annual Meeting in Incheon, Republic of Korea.
Leading the Sri Lankan delegation for the meeting, Sabry said he had a successful meeting with the ADB President Masatsugu Asakawa, the Minister said ADB has committed $ 650 million of technical support for the entirety of 2023, of which $ 350 has already been committed via a Special Policy Based Loan (SPBL) to support reforms and finance.
The Minister also said the SPBL will also extend $ 150 million for the power sector reforms, including renewable energy. In addition, financial sector stability is also supported through technical assistance.
“The Government expects to operationalise this $ 650 million and get the commitment from the ADB for the next four years. For that, we need to show our progress. By engaging them and getting them to commit to that we can continue to get the technical support of the ADB,” he explained.
Citing that ADB has always been a strong friend of Sri Lanka, Minister Sabry said during his meeting with the ADB Chief Asakawa commended the difficult decisions the Government took in terms of negotiating with the IMF, entering the EFF program, introducing cost-reflective pricing, control of inflation and the managing rupee.
“ADB President expressed optimism over the progress Sri Lanka has achieved compared to his sentiments shared during my last meeting in Washington,” he said on Sri Lanka’s outlook post-IMF EFF program.
The Foreign Minister also met with the ADB Executive Director in charge of Sri Lanka and discussed areas where technical support was needed.
“During both meetings, I had so far with the ADB officials, we conveyed that Sri Lanka is looking out for technical support on agriculture, digitalisation, renewable energy, financial sector stability support for the banks,” he said, adding that by getting loans and repaying is not going to help the country going forward.
Minister Sabry said technical support for digitalisation for revenue collection and procurement purposes was also sought.
“We also made a request for them to progressively downgrade Sri Lanka in terms of our ability to have access to the concessionary loans. I think we should get that and if that comes through we will have more access to concessionary loans as opposed to the current situation,” he said, noting the expectation with the ADB meetings is to secure technical support for Sri Lanka till the country slowly overcomes the ongoing economic crisis.
“Sometimes it is good to graduate from lower-middle income to upper-middle income economy, but with that, you lose access to concessionary loans. With the World Bank, we did this and hope the ADB will also do the same considering the dire need. During the discussions I had with the ADB officials, they showed a positive response to the request.