Today, the World Bank Group and the Government of Sri Lanka unveiled a new five-year Country Partnership Framework (CPF) aimed at facilitating Sri Lanka’s ongoing recovery, achieving a medium-term economic growth target of 7%, and promoting job creation.
“We are dedicated to building upon the macroeconomic stability, enhanced governance, and fiscal consolidation we have already established. Our objective is to confidently direct our economy toward robust, sustainable, and inclusive growth, targeting an economic growth rate exceeding 7% for the medium term,” stated Anura Kumara Dissanayake, President of Sri Lanka. “The World Bank Group has been our partner for over 70 years, and this new framework will further solidify that collaboration.”
Central to this partnership is the goal of fostering job creation led by the private sector. With nearly one million young individuals expected to enter the job market in the coming decade, the economy faces a challenge; without an increase in growth and private investments, only about 300,000 new formal jobs will be generated. This would result in approximately 70% of young job seekers lacking access to quality employment opportunities.
“The recovery Sri Lanka has achieved over the past three years has been both hard-earned and remarkable. This new partnership framework is crafted to ensure that its benefits are accessible to all,” remarked Johannes Zutt, World Bank Vice President for South Asia. “By combining public resources with private capital and innovation, we aim to assist Sri Lanka in creating quality job opportunities, especially for women, young people, and marginalized communities.”
The partnership is set to mobilize considerable resources from the World Bank Group, including over $1 billion in direct and mobilized investments from the International Finance Corporation (IFC) over five years, along with up to $1 billion in low-interest financing from the World Bank within the next three years. It will utilize a comprehensive suite of WBG tools, including financing, guarantees, advisory services, and private capital mobilization.
“The next growth phase for Sri Lanka will be led by a competitive and innovative private sector that generates jobs for all,” stated Sarvesh Suri, IFC Vice President for Asia and the Pacific. “With its strategic geographical position and skilled workforce, Sri Lanka is well-equipped to enhance its regional role, and we are committed to supporting the private sector as a driver of progress.”
The partnership will focus on four main areas: enhancing the business environment by simplifying regulations and modernizing trade processes to attract investments; improving infrastructure to benefit all citizens, including expanding the Port of Colombo and increasing renewable energy generation; creating more and better job opportunities in tourism and agriculture, particularly in underdeveloped regions; and preparing for future crises by funding resilient infrastructure and early warning systems following recent natural disasters.
Implementation of the framework will commence immediately. The World Bank’s Board of Executive Directors has approved the first significant project under this initiative: the Regional Empowerment through Vibrant, Inclusive, and Viable Economies (REVIVE) Project, which entails a $100 million investment in the Northern and Eastern Provinces. REVIVE aims to enhance local economic prospects in key areas such as Jaffna, Pasikuda, Trincomalee, and Arugam Bay, focusing on tourism and fisheries, while supporting small businesses, particularly those led by women. The project is expected to generate 3,000 new jobs and benefit approximately 260,000 individuals by 2031.
With over 70 years of collaboration, the World Bank Group currently supports 13 active projects in Sri Lanka, totaling over $1.5 billion across sectors like education, health, energy, transportation, agriculture, and social protection. The IFC has pledged nearly $1.8 billion in financing to Sri Lanka’s private sector from 2021 to 2026.
