World Bank Launches $1 Billion Initiative to Boost Jobs and Private Investment in Sri Lanka

The World Bank Group has unveiled a transformative initiative aimed at reinvigorating Sri Lanka’s economic landscape, committing over $1 billion in financing over the next three years. This ambitious program seeks to drive job creation, foster private sector development, and support long-term economic recovery in a country that has faced immense fiscal challenges in recent years.

A Strategic Investment in Key Growth Sectors

The newly announced financial package will prioritize four high-potential sectors identified for their capacity to generate employment and attract private capital: energy, agriculture, tourism, and regional development. These sectors are considered critical to unlocking economic potential across the island and ensuring equitable growth for all Sri Lankans.

Energy ($185 million): The energy component will support the development of new solar and wind power projects, with a targeted generation capacity of 1 gigawatt. These investments aim to reduce electricity costs for households and businesses while simultaneously reducing reliance on fossil fuels. The project is also expected to mobilize an additional $800 million in private sector investment, along with $40 million in World Bank-backed guarantees.

Agriculture ($100 million): To modernize the country’s agriculture sector, the initiative will assist farmers and agri-businesses in adopting cutting-edge technologies, improving market access, and attracting external investment. The program is expected to impact more than 380,000 people, including 8,000 agri-food producers, while leveraging an additional $17 million in private funding.

Tourism ($200 million): Recognizing the tourism sector’s potential to create inclusive economic opportunities, especially in rural communities, the World Bank is injecting $200 million to support tourism infrastructure. The funding will help preserve natural and cultural assets, stimulate local employment, and enhance the country’s attractiveness to international visitors.

Regional Development ($200 million): With an emphasis on equity and inclusion, this segment of the initiative focuses on historically underserved areas such as the Northern and Eastern Provinces. Investments will be directed toward local industries, transportation and infrastructure, and job-generating projects tailored to community needs.

High-Level Commitment and Historic Diplomacy

The initiative was announced following a high-level meeting between Sri Lankan President Anura Kumara Dissanayake and World Bank Group President Ajay Banga. This marks the first visit by a World Bank President to Sri Lanka in two decades, underscoring the significance of this renewed partnership.

President Dissanayake expressed his confidence in the initiative’s potential to bring meaningful change. “This support from the World Bank Group is an investment in the people of Sri Lanka,” he stated. “It will help create jobs, support small businesses, and open up new opportunities across the country. We are committed to ensuring this partnership delivers real change for our communities.”

Echoing this sentiment, Ajay Banga emphasized the importance of timing. “This is a moment of opportunity for Sri Lanka,” Banga said. “With progress underway to stabilize the economy and restart growth, core elements for job creation are in place. Now is the time to accelerate reforms and create the conditions for private enterprise to thrive—particularly in sectors that can create jobs at scale.”

Addressing a Critical Employment Gap

The World Bank estimates that nearly one million young Sri Lankans will enter the labor market over the next ten years. Yet projections suggest that only 300,000 new jobs will be created during the same period—a stark shortfall that threatens to stall economic mobility and increase social vulnerability. This initiative directly targets that employment gap by aligning public resources with private sector expertise and capital.

A Deepening of Longstanding Partnership

With current investments in Sri Lanka already surpassing $2.2 billion, the World Bank Group has reaffirmed its role as a steadfast development partner. This new initiative builds upon seven decades of collaboration, reinforcing the organization’s commitment to Sri Lanka’s sustainable and inclusive development.

The comprehensive approach combines financing, technical knowledge, and private sector engagement—a signature strength of the World Bank. This alignment of policy, capital, and innovation aims to lay the foundation for a more resilient economy and broader economic opportunity for all Sri Lankans.