News & market updates

Sri Lanka forecasts GDP growth of more than 5% in 2026, driven by post-Cyclone Ditwah reconstruction and planned capital spending. The government cited incoming donor/IMF support and said a $3.4bn Sinopec refinery deal is near finalisation to help spur investment.

The Cabinet approved raising the cost estimate for the Lower Malwathu Oya Multi-Purpose Development Project to Rs.47.18 billion and extended the completion date to 31 December 2030. Implementation will be locally funded and the project aims to expand irrigation across about 30,000 acres, add hydropower and improve drinking water.

Sri Lanka's cabinet approved resumption of the Lower Malwathu Oya hydro project, with the estimated cost rising 106.02% from Rs22.9bn in July 2019 to Rs47.18bn in Dec 2025. The increase reflects about a 74% rupee depreciation and broader inflation and monetary policy effects.

Colombo market recovered as the ASPI rose 0.17% (38.48 pts) to 22,333.25 and the S&P SL20 gained 0.31% to 6,071.12. Turnover was Rs 2.85bn on ~77.2m shares with foreign net outflows of Rs 42.8m; top contributors included DOCK, COMB, SAMP, MELS and DFCC.

Colombo Dockyard and several financials lifted the Colombo Stock Exchange 0.17% as the ASPI closed at 22,333.25. Market turnover rose to LKR 2.8bn with a net foreign outflow of LKR 42.76m; Lanka IOC had crossings of LKR 92.25m and Capital Alliance led turnover.

IFC's South Asia director urged Sri Lanka to rebrand as a green, outward-looking, export-driven investment destination and fix policy predictability. IFC has about $270m in long-term Sri Lanka exposure and is pursuing opportunities in tourism, digital services, agribusiness, renewables, manufacturing, healthcare, ports and finance.

Vidullanka PLC and WindForce PLC were awarded contracts by the Cabinet to build and operate two 50 MW wind power stations (100 MW total) for the Mullikulum Wind Power Project under 20-year BOO arrangements, advancing Sri Lanka's renewable energy targets.

Colombo market extended its rally to five sessions as the ASPI gained 1,011.18 pts (4.7%) for the week, reclaiming Rs.320.65 bn in market value; yesterday ASPI closed at 22,508.26 with turnover of Rs.3 bn. Top contributors included SFCL, JKH, HAYL, WIND and VLL; DOCK and HNB saw share price declines.

Colombo Stock Exchange rose 0.22% as the ASPI closed at 22,508.26 with turnover down to 3.02 billion rupees. Vidullanka and Windforce were awarded contracts to develop 50MW wind plants in Mannar, and several stocks (Senkadagala Finance, John Keells, Hayleys, Windforce, Vidullanka) helped lift the index.

Colombo market rose for a fourth straight session: ASPI +0.16% (36.85 pts) to 22,459.28 and S&P SL20 +0.18% (11.09 pts) to 6,095.15. Turnover was Rs.5.55bn, foreigners were net sellers of Rs.150.5m, and top ASPI contributors were DOCK, CINS, CFIN, HHL and SUN.

Vidullanka and Windforce were awarded contracts to develop two 50MW wind plants in Mullikulam, Mannar; Vidullanka bid 3.77 US cents/kWh and Windforce 3.96, the lowest tariffs so far.

Cabinet approved awarding two 50MW Mullikulum wind projects, one to Vidullanka PLC and one to WindForce PLC. The awards are part of the 100MW Mullikulum Wind Power Park bidding process and support the government's push to 70% renewable energy by 2030.

Janashakthi Life is the title sponsor of the Janashakthi Life – ICA International Half-Marathon 2025 in Colombo, which is sold out with over 2,000 participants and a Rs.5,700,000 prize pool. Other sponsors include Dialog and Lanka IOC, and proceeds will support ICA charitable initiatives including organ donation awareness.

Sri Lanka secured a $30 million IDA (World Bank) loan to fund the Secure, Affordable, and Sustainable Energy for Sri Lanka Project to expand and modernise grid capacity and accelerate renewable energy. The $60m project has a first-phase $30m loan (to be on‑lent to the Ceylon Electricity Board) and a proposed World Bank payment guarantee to scale private investment.

Sri Lanka has borrowed US$30 million from the World Bank to strengthen the electricity grid and enable greater renewable energy integration; the funds will be on‑lent to the Ceylon Electricity Board as part of a US$60m project supporting the government's 70% renewables-by-2030 target.

Colombo Stock Exchange regained nearly 40% of last week's Rs. 424 billion loss as the ASPI rose 2.04% (439.46 pts) to 22,034.32. Top contributors included DOCK, CINS, COMB, SAMP and ACL, with turnover around Rs. 3.88 billion.

Sri Lanka secured a USD 30 million IDA loan for the Secure, Affordable, and Sustainable Energy for Sri Lanka Project (total cost USD 60 million) to strengthen grid infrastructure and scale up renewable energy—aiming for 70% renewable electricity by 2030; the loan will be on-lent to and implemented by the Ceylon Electricity Board.

President Anura Kumara Dissanayake told Newsweek Sri Lanka is seeking market access, climate finance and investment to support recovery after Cyclone Ditwah while introducing rules-based investor safeguards (single-window approvals, Investment Protection Act) and overhauling disaster-management systems.

TotalEnergies Marketing India has partnered with Energy Core Lanka to introduce TotalEnergies' range of automotive, industrial and specialized lubricants to the Sri Lankan market, aiming to supply OEM-backed lubricant solutions for mobility and industry.

Moody’s says cyclone Ditwah will stymie Sri Lanka’s post-default fiscal consolidation as the government faces additional spending to repair widespread infrastructure damage. The storm severely hit roads, bridges, rail and power, disrupting supply chains and hitting tourism, agriculture and manufacturing.

CBSL Governor Dr. P. Nandalal Weerasinghe said post-Ditwah reconstruction must not derail reform momentum and that monetary, fiscal and external stability will be maintained. He warned of only a brief inflation uptick and limited balance-of-payments impact, and urged trade, labour and productivity reforms (including RCEP linkage).

IFC South Asia director Imad Fakhoury urged Sri Lanka to swiftly implement the Secured Transactions Act and key elements of the Economic Transformation Act to mobilise private capital and support a push toward 7% annual GDP growth. He highlighted renewable energy, logistics, export industries, digital services, specialised manufacturing, agribusiness and tourism as priority sectors and said about $11bn will be needed by 2030 for climate commitments.

The Sri Lanka–Russia Business Council held its 22nd AGM highlighting export opportunities in tea, rubber, spices and fisheries and renewed focus on promoting tourism with Russia remaining a top inbound market. The Council also flagged plans on trade settlement, SME access, tech transfer, renewables, logistics and education.

ADB approved a $100 million policy-based loan to support Sri Lanka's power sector reforms, including accelerating the unbundling of the Ceylon Electricity Board into independent generation, transmission, system operator and distribution companies. The program also backs cost-reflective tariffs, CEB debt restructuring, competitive procurement for large-scale renewable projects and a $2.5m technical assistance grant.

Sri Lanka signed a $100 million policy loan agreement with the Asian Development Bank to support power-sector reforms, establish independent financially sustainable electricity utilities and accelerate renewable energy development. Loan proceeds will be disbursed to the Treasury once the agreement is declared effective after pre-policy actions were completed.

Sri Lanka signed ADB agreements for a USD 100 million policy loan to implement Power Sector Reforms Subprogram 2 (supporting independent, financially sustainable electricity utilities and accelerated renewable energy) and a USD 3 million grant for Cyclone Ditwah emergency relief. Pre-policy actions for Subprogram 2 are complete; loan proceeds will be disbursed to the Treasury once the agreement is effective.

Ceylon Electricity Board reports 85% of the 3.9 million electricity connections disrupted by Ditwah have been restored. Of 16,771 inactive transformers, 14,549 have been repaired; one electricity worker died during restoration operations.

Sri Lanka's Ceylon Electricity Board restored power to 85% of the 3.9 million customers (55% of its 7 million customers) who lost service during Cyclone Ditwah. 16,771 transformers went inactive and 14,549 have been repaired; Kandy, Gampola and Nuwara Eliya were hardest hit and outages also affected telecom systems.