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World Bank rules out bridging finance to Sri Lanka until it gets its policy framework in order
The World Bank has ruled out bridging finance or new loan commitments to crisis-hit Sri Lanka until the nation’s economy sets up an adequate macroeconomic policy framework.
The World Bank issued a report on Tuesday following claims that the Washington-based institution was planning to support Sri Lanka to overcome the financial crisis in the form of a bridge loan or new loan commitments.
However, the WB has said that it is reshuffling the already allocated resources to provide essential medicines and other cash assistance to the vulnerable.
“Recent media reports have inaccurately stated that the World Bank is planning support for Sri Lanka in the form of a bridge loan or new loan commitments among other incorrect assertions,” the WB has said in a statement.
“We are concerned for the people of Sri Lanka and are working in coordination with the IMF and other development partners in advising on appropriate policies to restore economic stability and broad-based growth. Until an adequate macroeconomic policy framework is in place, the World Bank does not plan to offer new financing to Sri Lanka,” it said.
It expressed hope that Sri Lanka is making continuous efforts towards economic stability.
“We are currently repurposing resources from previously approved projects to help the government with some essential medicines, temporary cash transfers for poor and vulnerable households, school meals for children of vulnerable families, and support for farmers and small businesses,” the statement said.
Sri Lanka is near bankruptcy and has severe shortages of essentials from food, fuel, medicines and cooking gas to toilet paper and matchsticks. For months, people have been forced to stay in long lines to buy the limited stocks.
Sri Lanka has suspended repayment of about $7 billion in foreign loans due this year out of $25 billion to be repaid by 2026. The country’s total foreign debt is $51 billion.
Sri Lanka, in the midst of its worst economic crisis, has started a negotiating programME with the IMF.
The country however is in need of $4-5 billion bridging finance to arrest the crisis where shortages of essentials had led to street rioting.
Sri Lanka’s economic crisis has created political unrest with a protest occupying the entrance to the president’s office, demanding his resignation continuing for the past 40 days. The crisis has already forced Prime Minister Mahinda Rajapaksa, the elder brother of the President, to resign on May 9.
An inflation rate spiralling towards 40 percent, shortages of food, fuel and medicines and rolling power blackouts have led to nationwide protests and a plunging currency, with the government short of the foreign currency reserves it needed to pay for imports.
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U.S. Navy ship USS Tulsa arrives in Colombo for replenishment visit
The U.S. Navy ship USS Tulsa (LCS 16) arrived at the Port of Colombo this morning, 7 October 2026 for replenishment purposes.
The visiting ship was welcomed by the Sri Lanka Navy in accordance with naval traditions.
The 127.7-metre-long platform is a Littoral Combat Ship commanded by Commander BM Wanier. Commissioned on 16 February 2019, USS Tulsa has since been in service with the US Navy.
The ship previously made a port call in Sri Lanka on 27 August 2025.
News
Fuel crunch looms
Govt. tells fuel distributors to maintain stocks to ensure uninterrupted supplies
by Saman Indrajith and Norman Palihawadane
The government had instructed private fuel distributors to maintain minimum stocks and ensure uninterrupted supplies to the market, Energy Minister Anura Karunathilaka told Parliament yesterday (06).
Karunathilaka said the Ministry of Energy Secretary had notified the relevant companies of the requirement, following a reduction in supplies by some private distributors, amid higher international fuel prices.
The Minister said private companies had informed the government that they were facing losses because international prices had risen while fuel was being sold, locally, at prevailing prices. As a result, some companies had reduced the volumes released to the market.
The reduced supplies had increased the burden on the Ceylon Petroleum Corporation (CPC), whose share of the diesel market had risen from about 54% to 82%, the Minister said.
“The CPC currently holds an 82% share of the market,” he said, adding that it had increased its supplies, compared with February, to compensate for the reduction by private distributors.
Karunathilaka said the government could not, under the existing agreements with private companies, specify the quantities they should supply to individual filling stations. However, it could require them to maintain minimum stocks in the country.
The Minister said the Energy Ministry had already instructed companies that had failed to maintain the required stocks to take steps to prevent supply disruptions.
The Minister attributed the queues reported at some filling stations to reduced supplies from private distributors, as well as normal variations in fuel distribution. He also said demand for CPC fuel had increased because private companies generally did not provide fuel to dealers on credit, while the CPC offered a three-day credit facility.
“We expect that, as the Ceylon Petroleum Corporation takes on this additional burden, the problem will ease to some extent by Wednesday or Thursday,” Karunathilaka said.
He said instructions had also been issued to increase supplies to CPC filling stations. A special discussion on the issue is scheduled for today (07), with officials of the Energy Ministry and CPC expected to participate,
along with President Anura Kumara Dissanayake.
Meanwhile, Petroleum Dealers’ Association officials have called for an early solution to the supply issue. Association Chairman D.V. Shantha Silva said queues had been reported at many filling stations, mainly those operated by private distributors.
He said the situation was not due to an overall shortage of fuel, but was linked to reduced orders by Lanka IOC, Sinopec and R.M. Parks amid concerns over losses incurred on fuel sales.
The Ceylon Petroleum Private Tanker Owners Association has urged motorists to refrain from panic buying, saying there was no nationwide disruption to fuel supplies.
The government earlier increased fuel prices and introduced a per-litre diesel subsidy following concerns raised by distributors over rising international prices.
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