The government has approved obtaining a USD 100 million loan from the Asian Development Bank (ADB) to implement the second phase of Sri Lanka’s Water Supply and Sanitation Reform Program.The Cabinet of Ministers approved a proposal submitted by President Anura Kumara Dissanayake, in his capacity as Minister of Finance, to enter into an agreement with the ADB to secure the financing.

According to the Cabinet decision, the USD 100 million facility will consist of USD 50 million from the ADB’s Ordinary Capital Resources and another USD 50 million from its Concessional Ordinary Capital Resources.The funding will be utilized to implement Subprogram 2 of the Water Supply and Sanitation Reform Program, aimed at addressing key challenges in Sri Lanka’s water supply and sanitation sector.The program is expected to support reforms targeting weaknesses in water resources management, operational and financial inefficiencies, exposure to climate-related risks, shortcomings in social inclusion and inadequate coordination among stakeholders.

The proposed financing forms part of a broader USD 620 million policy-based loan program from the ADB, covering five subprograms to support Sri Lanka’s economic reform agenda.The Cabinet had previously granted approval on March 16, 2026, to obtain the USD 620 million financing package in parallel with the International Monetary Fund’s Extended Fund Facility (EFF) program.The latest Cabinet decision enables the government to proceed with the financing agreement for the water supply and sanitation reforms.