Sri Lanka's Cabinet has approved a $100 million loan from the World Bank's International Development Association to support economic development in the Northern and Eastern provinces as part of a larger regional investment initiative.
Sri Lanka's Cabinet has authorized the government to enter into financial agreements with the World Bank's International Development Association (IDA) to access a $100 million loan aimed at fostering economic development in the Northern and Eastern provinces. The loan represents part of a broader $1 billion allocation the IDA has designated for Sri Lanka over the 2026-2031 period to support economic expansion and stability across the country.
Cabinet Spokesman Minister Nalinda Jayatissa confirmed the decision at the weekly post-Cabinet media briefing, noting that the President, in his role as Minister of Finance, Planning, and Economic Development, had presented the proposal for approval. Negotiations between Sri Lanka's government and the World Bank Group concluded successfully following initial Cabinet endorsement in February 2026.
The Integrated Regional Development Program aims to accelerate economic growth and enhance competitiveness in the two provinces by strengthening sectors with significant development potential. The initiative will prioritize support for micro, small, and medium-scale enterprises, improve local livelihoods, and strengthen regional infrastructure and connectivity. Officials indicated the funding is intended to drive local business expansion, revitalize key economic sectors, and establish conditions for sustainable inclusive growth in the Northern and Eastern regions.
