ADB extends $200 Million to help Sri Lanka tackle economic pressures from Middle East conflict
The Asian Development Bank (ADB) has announced a $450 million financing package for Cambodia and Sri Lanka to help the two countries address the economic impact of the conflict in the Middle East, which has increased costs and created uncertainty across Asia and the Pacific.
The package includes a $250 million loan for Cambodia’s Rapid Intervention for Stabilization of the Economy (RISE) Program and a $200 million policy-based loan for Sri Lanka’s Trade, Investment, and Industry Development Program.
According to the ADB, the funding is intended to provide immediate support while also backing longer-term economic reforms.
ADB President Masato Kanda said the bank aims to help more than one million vulnerable households in Cambodia while supporting Sri Lanka’s efforts to create jobs, attract investment, and expand trade to strengthen the country’s economy against future external shocks.
In Cambodia, the RISE Program will finance temporary and targeted fiscal measures while protecting planned social spending under the 2026 national budget. It will also promote clean energy technologies.
More than one million low-income households registered under the government’s IDPoor program are expected to receive income support, including at least 350,000 households headed by women. The program will also provide debt relief and assistance for agricultural inputs in rural areas.
ADB said its $250 million loan for Cambodia will be supported by additional financing of up to $250 million from the Asian Infrastructure Investment Bank (AIIB) and up to $188 million from the Japan International Cooperation Agency (JICA), bringing the total potential financing for the program to $688 million.
For Sri Lanka, the ADB’s $200 million loan includes $100 million in additional financing to help the country manage economic pressures linked to the Middle East conflict.
The Sri Lankan program will support reforms aimed at modernising trade systems, improving the competitiveness of small and medium-sized enterprises (SMEs), and attracting investment to economic zones. The reforms are expected to help businesses expand exports, integrate into regional and global value chains, create jobs, and promote private sector-led growth.
ADB said the reforms will also strengthen Sri Lanka’s economic resilience by diversifying exports and improving competitiveness, making the country better prepared to withstand future external shocks.
The Asian Development Bank is a multilateral development bank established in 1966 and owned by 69 members, including 50 from Asia and the Pacific. It supports sustainable, inclusive, and resilient development across the region.
