Washington: The World Bank has approved USD 700 million for two operations to help Sri Lanka implement foundational reforms to restore macroeconomic stability and sustainability and support an inclusive, private-sector-led recovery and growth path.

"The World Bank Board of Directors also approved USD 700 million in financing for two operations to help Sri Lanka implement foundational reforms that restore macroeconomic stability and sustainability, mitigate the impact of current and future shocks on the poor and vulnerable, and support an inclusive and private-sector-led recovery and growth path," World Bank announced in a press release.

About USD 500 million will be allocated to support reforms that help improve economic governance, enhance growth and competitiveness, and protect the poor and vulnerable.

Furthermore, USD 200 million has been approved to support Sri Lanka in providing better-targeted income and livelihood opportunities to the poor and vulnerable and improving the responsiveness of the social protection system.

"The Sri Lanka Resilience, Stability and Economic Turnaround (RESET) Development Policy Operation (USD 500 million) will support reforms that help improve economic governance, enhance growth and competitiveness, and protect the poor and vulnerable. It will provide budget support in two equal tranches against agreed prior actions," World Bank announced in a press release.

It further said, "The Social Protection Project (USD 200 million) seeks to support Sri Lanka in providing better-targeted income and livelihood opportunities to the poor and vulnerable and improving the responsiveness of the social protection system."

On Wednesday, the World Bank Group's Board of Executive Directors discussed the new Country Partnership Framework (CPF) for Sri Lanka, which aims to help restore economic and financial sector stability and build a strong foundation for a green, resilient, and inclusive recovery.

The Country Partnership Framework comes at a time when Sri Lanka is facing an economic crisis that is affecting people's lives and livelihoods.

According to World Bank's press release, Sri Lanka's poverty rate is estimated to have doubled from 13.1 to 25 per cent between 2021 and 2022.

"The extent of the crisis in Sri Lanka is unprecedented, but offers a historic opportunity for deep reforms to reset the country's economic storyline," said Faris H Hadad-Zervos, World Bank Country Director for Sri Lanka.

He further said, "The CPF supports this shift. Through a phased approach, the World Bank Group strategy focuses on early economic stabilization, structural reforms, and protection of the poor and vulnerable. If sustained, these reforms can put the country back on the path towards a green, resilient and inclusive development."

Earlier in March, the Executive Board of the International Monetary Fund (IMF) approved a 48-month extended arrangement under the Extended Fund Facility (EFF) with an amount of SDR 2.286 billion (395 per cent of quota or about USD 3 billion) for Sri Lanka.