The Asian Development Bank (ADB) has approved a $100 million financing package to support public expenditure management, despite military occupation across the North-East.
The program aims to support macroeconomic stability by strengthening public expenditure management, improving revenue mobilisation, and foster private sector participation.
The Manila-based financial institution has provided $12.6 billion in assistance to Sri Lanka since 1966. This latest funding, follows $900 million in approved projects in 2025.
The program aims to support macroeconomic stability and sustainable growth following the economic crisis by strengthening public expenditure management, improving revenue collection, and fostering private sector participation. This includes enhancing the management, transparency, and accountability of state-owned enterprises (SOEs), strengthening the legal and institutional framework for public–private partnerships (PPPs), and improving the pipeline of climate-related projects, including those implemented through PPPs.
In addition, it will enhance revenue mobilisation by strengthening revenue generation through stronger domestic and international tax compliance, such as the development and implementation of a multiyear tax compliance improvement strategy and by further deepening international tax cooperation following Sri Lanka’s recent membership to the Global Forum on Transparency and Exchange of Information for Tax Purposes.
The program will support the government’s efforts to improve the enabling environment for private sector participation, including developing a legal framework for public–private partnerships (PPP) that is aligned with international best practices and mobilising additional climate finance and private investment. It will also focus on strengthening the management, transparency, and accountability of state-owned enterprises (SOE). In addition to the draft PPP law, this includes a comprehensive Fiscal Risk Statement and a climate finance strategy that aims to crowd in other sources of finance to support Sri Lanka’s climate ambition and resilience.
The programmes focus on pubic expenditure management and private sector participation, comes as the country's military budget expenditure grew despite promised reductions in personnel size. Large swathes of the military continue to occupy lands across the North-East, despite the armed conflict ending 16 years ago. The military continues to stifle local Tamil businesses across the region, through the occupation of land and the undercutting present through military-owned businesses. A recent report published by the United Nations found that the Sri Lankan military occupation of the North-East heightens the climate vulnerability of Tamils.
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