The Asian Development Bank (ADB) is deploying US$4 billion in financing to help countries withstand the impact of the West Asia conflict, including about $3 billion requested by several governments — Sri Lanka among them — and $1 billion as trade finance for energy and food imports, ADB President Masato Kanda said on Friday.
“ADB is acting with speed and scale to support countries experiencing a range of impacts from the Middle East conflict, including pressure on finances, remittances, tourism, and fuel and fertilizer supplies,” Kanda said in remarks reported by EconomyNext. “At this time of acute uncertainty and risk, we are deploying our full suite of crisis response instruments — including budget support, trade finance, and a new mechanism to rapidly repurpose existing portfolio funds — to deliver the tailored and timely support our members, from large to small, need to safeguard their economies and communities.”
The bank has received formal requests from 15 affected governments across the region — Sri Lanka, Bangladesh, Fiji, the Philippines and 11 others. Individual requests range from $15 million to $1.5 billion and span policy-based loans, countercyclical financing, rapid repurposing of existing sovereign portfolio funds, and emergency assistance loans. ADB is also in active talks with four further countries facing continued economic impact.
In a separate but parallel announcement, the Government of India has requested $1.5 billion in ADB financing tied to urban transformation ($1bn policy-based loan) and rooftop solar ($500 million for clean energy, battery storage, and domestic manufacturing). The bank said it has also reactivated support for oil imports under its Trade and Supply Chain Finance Program (TSCFP) on an exceptional basis for a limited period to soften the impact of rising oil prices and supply chain disruptions.
Sri Lanka’s request to the ADB had been previously flagged in CBSL Governor Nandalal Weerasinghe’s June 11 briefing to Parliament’s Committee on Public Finance. The ADB had earlier this cycle warned the Iran war could shave 0.8 percent off Sri Lanka’s GDP and downgraded its regional Asia-Pacific growth outlook for 2026 over the Middle East conflict. The bank’s $50 billion Pan-Asia Power Grid Initiative (PAGI) was launched on June 9 in Manila. Kanda’s Friday package, with reactivated trade finance for oil and direct sovereign budget support, is the most concrete crisis-response instrument deployed for Sri Lanka under the Iran war cycle to date.
Source: EconomyNext.
