Sri Lanka is to utilise its existing fiscal space and donor aid for required reconstruction aid, which is yet to be substantiated as $ 7 billion by the World Bank and Governmental agencies, Labour Minister and Management Committee for Rebuilding Sri Lanka Fund Chairperson Anil Jayantha Fernando said, speaking to Al Jazeera on Monday (8).
“That estimate is media. The official, authenticated estimate has not been done. The World Bank and the Government agencies are working together. Within a couple of weeks time we will get a proper estimate,” Fernando said, responding to a question on the estimated sum of money that will be required to recover and reconstruct the damage that Sri Lanka has faced, post-Cyclone Ditwah.
“However, whatever the real damage is, of course we need to find money. We made a supplementary allocation for this year and for next year.” Attending a Committee of Public Finance meeting last Friday (5), Deputy Treasury Secretary Ananda Seneviratne stated that Rs. 50 billion in unspent allocated funds meant for other ministries is to be redirected to the disaster relief efforts.
Seneviratne said that the parliamentary approval for this move will be sought via a supplementary estimate. President Anura Kumara Dissanayake told Parliament on Friday (05) that the Government had presented a Rs. 50 billion supplementary estimate to finance urgent disaster relief, and that another estimate for Rs. 500 billion will be presented in January 2026.
Last week, (3) Committee on Public Finance Chairperson and Parliament Member Harsha de Silva said that estimates for recovery and reconstruction were likely around $ 6 billion.
“We do not exactly know the total damage; some say it’s $ 3 billion, Minister Alawathuwala told me it’s $ 6 billion. It hasn’t been assessed properly. The World Bank has been commissioned to present a study on the total damage in two weeks’ time. When we say $ 6 billion, that’s around Rs. 2 trillion.”
According to Fernando, speaking to Al Jazeera, he said that though the Government may rely on its fiscal space, donor support may be key. “Some part comes from the fiscal space and the other from donor agencies. We are working with the IMF programme. Now they are considering extra: the money that’s called the RFI, the Rapid Financial Instrument, through which they will be considering providing another $ 200 million.”
Based on the formal request made by Sri Lanka to the International Monetary Fund (IMF) for $ 200 million in aid last week, the multilateral released a statement on its consideration for extending its Rapid Financial Instrument (RFI).
Sri Lanka is to receive its sixth tranche from the Extended Fund Facility (EFF) of the IMF this month, amounting to approximately $ 350 million, as part of its 48-month, $ 2.9 billion facility to support Sri Lanka’s economic policies and reforms. “As of now, our economy doesn’t help to face this particular situation alone,” Fernando said.