ADB to extend $ 200 m to shield Sri Lanka from Middle East impact

Friday, 31 July 2026 00:28 - - {{hitsCtrl.values.hits}}

The Asian Development Bank (ADB) is set to deploy $ 450 million to protect poor households and strengthen the economies of Sri Lanka and Cambodia as the conflict in the Middle East drives up costs and deepens uncertainty across Asia and the Pacific.

“No family should be pushed deeper into poverty by a conflict thousands of kilometres away,” said ADB President Masato Kanda yesterday. “We are moving quickly to protect more than 1 million struggling households in Cambodia while helping Sri Lanka create jobs, attract investment, and expand trade. These investments will help both countries withstand today’s pressures and emerge stronger from the next shock.”

The package combines immediate crisis support with longer-term economic reforms. It includes a $ 250 million loan for Cambodia’s Rapid Intervention for Stabilisation of the Economy (RISE) Program and a $ 200 million policy-based loan for Sri Lanka’s Trade, Investment, and Industry Development Program.

In Cambodia, the RISE Program will fund temporary, targeted fiscal measures and protect planned social spending in the 2026 national budget. It will also promote clean energy technologies. More than 1 million poor households registered under the government’s IDPoor program will receive income support, including at least 350,000 households headed by women. Assistance will also include debt relief and support for agricultural inputs in rural areas.

ADB’s $ 250 million loan will be complemented by the equivalent of up to $ 250 million from the Asian Infrastructure Investment Bank and the equivalent of up to $ 188 million from the Japan International Cooperation Agency. Combined financing for the program could reach $688 million.

In Sri Lanka, ADB’s $ 200 million loan includes $100 million in additional financing to help the country absorb the economic pressures created by the conflict. The program supports reforms to modernise trade systems, make small and medium-sized enterprises more competitive, and attract investment to economic zones.

The reforms will help enterprises expand, export, and integrate into regional and global value chains, creating jobs and supporting private sector-led growth. By diversifying exports and strengthening competitiveness, the program will also enhance the economy’s resilience to future external shocks.