Sri Lanka gets first tranche of budget support loan from World Bank amounting to $250 million

Sri Lanka’s State Minister of Finance, Shehan Semasinghe has said that Sri Lanka has received the first tranche of a budget support loan from World Bank amounting to $250 million.

This loan is part of a larger agreement, to borrow a total of $500 million in budget support and $200 Million in Welfare support.

The loan will be disbursed in two tranches and is tied to certain conditions set by the International Monetary Fund (IMF) program, known as structural benchmarks. Sri Lanka will receive these funds through the World Bank’s concessionary International Development Association window.

Welfare support of $200 million will be utilized to provide relief to those severely affected by the ongoing crisis through social welfare measures.

Earlier last year, Sri Lanka had defaulted on its external debt commitments as it faced its worst ever economic crisis with acute forex shortages since its independence in 1948.

During the crisis, India came to the rescue of Sri Lanka with an unprecedented humanitarian assistance of $4 billion for essential imports which helped keep the island nation afloat. India was also the first creditor nation to have given financing assurances in line with IMF standards which was essential for the $3 billion bailout from IMF.