IMF approves $206mn aid to Sri Lanka after Cyclone Ditwah

WASHINGTON: The International Monetary Fund said Friday that its board has approved $206 million in emergency financing for Sri Lanka, to help in the country’s recovery from the devastating Cyclone Ditwah.

The natural disaster killed more than 640 people, and affected more than 10 percent of Sri Lanka’s population. Floods and landslides caused by the cyclone left extensive damage throughout the South Asian island nation.

“The disaster has created urgent humanitarian and reconstruction needs, generating significant fiscal pressures and balance-of-payments needs,” IMF deputy managing director Kenji Okamura said in a statement.

The IMF’s emergency aid – which comes under the Washington-based lender’s rapid financing instrument – is meant to help address these pressures, he added.

The announcement comes a day after Sri Lanka’s government unveiled plans for $1.6 billion in additional spending next year to fund cyclone recovery.

The government had also earlier secured a World Bank agreement to repurpose $120 million from an ongoing project for disaster recovery spending.

Sri Lanka forecasts 5% growth in 2026, aided by post-cyclone reconstruction

Separately, it got a $200 million loan from the Asian Development Bank to finance water management, the first such funding since the cyclone.

The IMF said Friday that Sri Lankan authorities are still committed to their economic reform program aided by support of around $3 billion.

A further tranche of this rescue package known as the Extended Fund Facility was coming up when the cyclone hit.

The IMF said it has deferred the fifth review of the package, with a team set to visit Sri Lanka in early 2026 to resume discussions.

It noted this deferment took place due to the time needed to assess the cyclone’s economic impact and examine how an IMF-supported program can best support Sri Lanka’s recovery and reconstruction efforts – while preserving policy priorities.