World Bank Launches New $2 Billion Partnership to Drive Sri Lanka’s Recovery and Job Creation

The World Bank Group and the Government of Sri Lanka have unveiled a new five-year Country Partnership Framework (CPF) aimed at accelerating economic recovery, boosting private sector growth and generating jobs, as the country targets over 7% medium-term economic growth.

The framework comes at a pivotal moment for Sri Lanka's economy, which is emerging from a prolonged financial crisis and seeking to stabilise growth while addressing unemployment and structural weaknesses.

Private Sector at the Core of Growth Strategy

At the heart of the new partnership is a strong emphasis on private sector-led job creation, reflecting concerns over a looming employment gap. Nearly one million young Sri Lankans are expected to enter the labour market in the next decade, but current projections suggest only around 300,000 formal jobs may be created—leaving nearly 70% without quality employment opportunities.

World Bank officials stressed that mobilising private investment and innovation will be critical to bridging this gap and ensuring inclusive growth.

$2 Billion in Financing and Investment

The CPF mobilises substantial financial resources, including:

• Over $1 billion in investments from the International Finance Corporation (IFC) over five years

• Up to $1 billion in low-interest financing from the World Bank over three years

These funds will be complemented by advisory services, guarantees and private capital mobilisation to maximise impact.

Four Strategic Pillars for Transformation

The partnership is structured around four key reform and investment areas:

1. Improving the Business Environment: Efforts will focus on simplifying regulations, digitising government services and modernising trade systems to attract investment. These reforms aim to double export earnings to $36 billion by 2030.

2. Expanding Infrastructure and Clean Energy: Investments will strengthen the Port of Colombo as a regional maritime hub and support a transition to 70% renewable electricity by 2030, including the addition of 1 gigawatt of clean energy capacity.

3. Job Creation in Tourism and Agriculture: The framework prioritises sectors with high employment potential, including tourism and agriculture. It will support the Tourism Strategic Plan 2026–2030 and improve farmers' access to markets, technology and finance, particularly in underserved Northern and Eastern Provinces.

4. Strengthening Resilience to Future Shocks: Following Cyclone Ditwah in 2025, which caused $4.1 billion in damages and affected 2.2 million people, the CPF includes investments in disaster preparedness, early warning systems and resilient infrastructure.

Immediate Rollout with $100 Million REVIVE Project

Implementation is already underway, with approval of the $100 million REVIVE Project, targeting economic revitalisation in key regions such as Jaffna, Trincomalee and Arugam Bay.

The project is expected to:

• Create 3,000 jobs

• Benefit around 260,000 people by 2031

• Support small businesses, especially women entrepreneurs

Building on Decades of Partnership

The World Bank Group has been a longstanding partner in Sri Lanka's development for over 70 years, currently supporting 13 active projects worth more than $1.5 billion across sectors such as education, health, energy and social protection.

IFC has also committed nearly $1.8 billion to Sri Lanka's private sector between 2021 and 2026, reinforcing its role in driving economic recovery.

A Critical Phase for Economic Recovery

Sri Lanka's leadership has framed the partnership as a crucial step toward stabilising the economy and achieving sustainable growth.

With macroeconomic reforms underway and fiscal consolidation improving, the new framework is designed to ensure that recovery translates into jobs, investment and inclusive development.

As global economic uncertainties persist, the success of this partnership could play a decisive role in determining whether Sri Lanka can transition from recovery to long-term, resilient growth.