The programme is part of a broader package of financial assistance anchored by the International Monetary Fund’s (IMF) Extended Fund Facility for the debt-ridden South Asian country, the ADB said.

The island nation, struggling to emerge from its worst financial crisis since independence in 1948, secured a US$2.9 billion bailout from the IMF in March but must now have a debt restructuring framework in place by September to take the programme forward.

“ADB is concerned about the deep crisis in the country and its impact on the people of Sri Lanka, especially the poor and the vulnerable, particularly women,” ADB President Masatsugu Asakawa said in the statement.

“ADB is committed to standing with Sri Lanka as it addresses its present challenges and strides toward economic stabilisation, sustainable recovery, and inclusive growth.”

Sri Lanka owes US$7.1 billion to bilateral creditors, with $3 billion owed to China, US$1.6 billion to India and US$2.4 billion to the Paris Club, a group of creditor nations.

The government also needs to renegotiate more than US$12 billion of debt in eurobonds with overseas private creditors, and US$2.7 billion on other commercial loans.

“The country faces a long road to recovery and must remain steadfast in the implementation of necessary reforms,” ADB said.