Business
IMF reaches staff-level agreement on Second Review of Sri Lanka’s EFF
After constructive discussions in Colombo, IMF Senior Mission Chief Peter Breuer and Deputy Mission Chief Ms. Katsiaryna Svirydzenka issued the following statement:
“The IMF team reached staff-level agreement with the Sri Lankan authorities on the second review under the economic reform program supported by a 4-year Extended Fund Facility (EFF) arrangement and concluded the 2024 Article IV Consultation discussions. The EFF arrangement was approved by the IMF Executive Board for a total amount of SDR 2.3 billion (about US$3 billion) on March 20, 2023.
“The staff-level agreement is subject to the approval by IMF management and the IMF Executive Board in the period ahead, contingent on: (i) the implementation by the authorities of prior actions; (ii) the completion of financing assurances review, which will focus on confirming multilateral partners’ committed financing contributions and whether adequate progress has been made with the debt restructuring to give confidence that the restructuring will be concluded in a timely manner and in line with the program’s debt targets. “Upon completion of the Executive Board review, Sri Lanka would have access to SDR 254 million (about US$337 million), bringing the total IMF financial support disbursed under the arrangement to SDR 762 million (about US$1 billion).
“The authorities are making good progress in implementing an ambitious reform agenda under the EFF with commendable outcomes, including rapid disinflation, robust reserve accumulation, and initial signs of economic growth while preserving the stability of the financial system. Public finances have strengthened following substantial fiscal reforms. Program performance was strong, with all quantitative performance criteria and indicative targets for end-December 2023 met except for the indicative target on social spending. Most structural benchmarks due before end-February 2024 were either met or implemented with delay. Reforms in some areas are still ongoing.
“The economic situation is gradually improving. Growth turned positive after six consecutive quarters of contraction, registering 1.6 percent and 4.5 percent y-o-y growth in the third and fourth quarters of 2023 respectively. High-frequency economic indicators point to a continued pick-up in manufacturing, construction, and services. Inflation has come down from a peak of 70 percent in September 2022 to 5.9 percent in February 2024.
Gross official reserves increased to US$4.5 billion at end-February 2024 with sizeable foreign exchange purchases by the central bank. “Sustaining the reform momentum is critical to put the economy on a path towards lasting recovery and stable and inclusive economic growth. We welcome the authorities’ commitment to fiscal reforms. Continued progress towards the introduction of the property tax is critical, together with revenue measures to meet the revenue mobilization goals in 2025 and beyond. Revenue administration and anti-corruption efforts to boost tax collections are also key.
Maintaining cost recovery in fuel and electricity pricing will help minimize fiscal risks arising from state-owned enterprises. “While inflation has decelerated faster than expected, continued monitoring is warranted to help anchor inflationary pressures and support macroeconomic stability. Against ongoing external uncertainty, it remains important to continue to rebuild external buffers through strong reserves accumulation. “Sri Lanka’s Agreements in principle with the Official Creditor Committee and Export-Import Bank of China on debt treatments consistent with program parameters were important milestones putting Sri Lanka’s debt on the path towards sustainability.
The critical next steps are to finalize the agreements with the official creditors and reach Agreements in Principle with the main external private creditors in line with program parameters in a timely manner. This should help restore Sri Lanka’s debt sustainability over the medium term. “The authorities’ recently published Action Plan to implement the key recommendations of the Governance Diagnostic Report is a welcome step. Sustained efforts to implement these reforms will be essential for addressing corruption risks, rebuilding economic confidence, and making growth more robust and inclusive.
The IMF mission team met with tea plantation workers in Nuwara Eliya and learned first-hand about some of the challenges Sri Lanka’s most vulnerable face. Continued efforts to improve targeting, adequacy, and coverage of social safety nets, particularly Aswesuma, remain critical to protect the poor and the vulnerable.
“The IMF team held meetings with President and Finance Minister Ranil Wickremesinghe, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe, Minister of Power and Energy Mr. Kanchana Wijesekera, State Minister Mr. Shehan Semasinghe, Chief of Staff to the President Mr. Sagala Ratnayaka, Secretary to the Treasury Mr. K M Mahinda Siriwardana, and other senior government and CBSL officials. The team also met with Parliamentarians, representatives from the private sector, civil society organizations, and development partners. “We would like to thank the authorities for the excellent collaboration
(CBSL)
Business
Sri Lanka eyes India grid link as ADB pushes Pan-Asia energy integration
Sri Lanka’s long-discussed electricity grid connection with India is gaining renewed momentum, as the Asian Development Bank (ADB) intensifies efforts to promote cross-border energy integration across the region.
At the ADB Annual Meetings in Samarkand, Senior Director for Energy, Priyantha Wijayatunga, identified the proposed India–Sri Lanka grid interconnection as the most promising avenue to strengthen the island’s power sector. The concept dates back to the 1970s, when Sri Lanka, following the completion of the Mahaweli Development Project, even explored the possibility of exporting electricity. However, rapid economic growth and rising domestic demand shifted the country toward energy imports.
Today, with energy security and cost pressures mounting, the idea has regained urgency. “The time is right,” Wijayatunga said, stressing that political will and financing will be decisive. While undersea transmission cables make the link technically viable, costs remain a major challenge. The ADB, he confirmed, stands ready to support Sri Lanka as a development partner in advancing the project.
Sri Lanka’s prospects are closely tied to a broader regional vision being advanced by the ADB through its Pan-Asia Power Grid Initiative (PAGI). The initiative aims to transform how energy is produced, shared, and consumed across Asia and the Pacific by promoting cross-border electricity trade and grid connectivity.
PAGI is designed not merely as a collection of projects, but as a systems-level integration platform that connects national grids into subregional and eventually continent-wide networks. Its core objectives include bridging energy gaps, enhancing energy security, integrating large-scale renewable energy, and strengthening resilience across interconnected systems.
A key pillar of PAGI is leveraging the region’s resource complementarity. Countries in South Asia, for instance, possess uneven but highly complementary energy resources—hydropower in Nepal and Bhutan, and solar and wind potential in India. By linking grids, countries like Sri Lanka could tap into these diverse energy sources, reducing dependence on costly fossil fuel imports while improving reliability.
ADB estimates suggest that deeper regional power trade in South Asia could yield substantial economic benefits, including lower system costs and more efficient energy distribution. The initiative also envisions mobilizing up to $50 billion in investments by 2035, expanding transmission infrastructure, and improving electricity access for millions.
For Sri Lanka, integration into such a regional grid could be transformative. A connection with India would allow the country to import affordable electricity during shortages, stabilize supply, and support its transition toward cleaner energy. It could also open the door to future participation in a wider South Asian power market.
With feasibility studies and policy discussions already underway, and with ADB backing firmly in place, Sri Lanka’s long-envisioned grid connection with India now appears more achievable than ever.
As the Samarkand meetings underscore the urgency of regional cooperation in an increasingly uncertain energy landscape, Sri Lanka stands at the threshold of a new chapter—one where energy security is strengthened not in isolation, but through connection.
by Sanath Nanayakkare in Samarkand, Uzbekistan
Business
Oceans in crisis: Sri Lanka hosts ‘Sharks International 2026’ amid stark warnings
Sri Lanka this week finds itself at the centre of a deepening global ocean crisis, as leading scientists, policymakers and conservationists gather in Colombo for Sharks International 2026—a high-profile summit unfolding against mounting evidence that the world is rapidly losing control of its marine ecosystems.
The conference, now underway at the Bandaranaike Memorial International Conference Hall, marks the first time the prestigious forum has been hosted in Sri Lanka. But beneath the diplomatic language and scientific exchanges lies a far more urgent reality: the collapse of shark and ray populations is no longer a distant environmental concern—it is an unfolding economic and food security emergency.
More than 100 million sharks and rays are being wiped out globally each year, largely due to overfishing and illegal, unreported and unregulated (IUU) fishing. In Sri Lanka, the situation is particularly acute. Of the 105 species recorded in local waters, nearly 70 are now threatened with extinction, a statistic that scientists warn should set off alarm bells far beyond conservation circles.
Deputy Minister of Environment Anton Jayakody did not mince words when addressing the gathering, framing the issue not just as an ecological tragedy but as a looming economic shock.
“This is not just about saving species. It is about protecting the foundation of our fisheries, our food systems, and the livelihoods of thousands of Sri Lankans. If shark and ray populations collapse, the consequences will ripple through the entire marine economy,” he said.
Sharks and rays sit at the top of the ocean food chain. Their disappearance disrupts the delicate balance of marine ecosystems, triggering cascading effects that can decimate commercially valuable fish stocks. For a country like Sri Lanka—where coastal communities depend heavily on fisheries—this is not an abstract threat but a direct challenge to economic stability.
Yet despite years of warnings, critics argue that global action has been dangerously slow, fragmented, and often undermined by competing commercial interests.
By Ifham Nizam
Business
SriLankan Airlines leads with two category wins in South Asia at PAX Awards
SriLankan Airlines led with two wins in the Airline Award category for South Asia, securing both Best Overall Passenger Experience and Most Improved Airline at the PAX International Readership Awards 2026 held recently in Hamburg, Germany. The awards celebrate the industry’s best and brightest, with winners determined by votes from PAX’s global readership.
The Best Overall Passenger Experience – South Asia award recognises an airline that delivers an exceptional onboard experience to passengers across multiple service areas, including meal service, inflight entertainment and seating. At SriLankan Airlines, this entails meticulous planning at every stage of the passenger journey, supported by collaboration among multiple teams and continuous monitoring and refinement.
Maria Sathasivam, Manager Product Development of SriLankan Airlines, commented on the achievement, stating, “we are incredibly honoured to receive yet another independent endorsement of the service we deliver. Every interaction matters to us, and we are committed to consistently meeting and exceeding passenger expectations, and it is truly rewarding to see these efforts recognised.”
SriLankan Airlines continues to enhance the end-to-end travel experience, from booking through to arrival. Ongoing digital upgrades, including improvements to the airline’s website and app, are designed to deliver a more intuitive and seamless customer experience, supported by AI-driven features and expanded ancillary offerings. At its hub, the Bandaranaike International Airport in Colombo, the airline has also expanded self-check-in and bag drop facilities for added convenience.
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