(Reuters)- The World Bank approved $700 million in budgetary and welfare support for Sri Lanka on Thursday, the biggest funding tranche for the crisis-hit island nation since an International Monetary Fund (IMF) deal in March.
About $500 million of the funds will be allocated for budgetary support while the remaining $200 million will be for welfare support earmarked for those worst hit by the crisis.
“Through a phased approach, the World Bank Group strategy focuses on early economic stabilization, structural reforms, and protection of the poor and vulnerable,” the World Bank’s country director for Sri Lanka, Faris Hadad-Zervos, said in a statement.
“If sustained, these reforms can put the country back on the path towards a green, resilient and inclusive development,” Zervos said.
Sri Lanka is struggling with the worst financial crisis since its independence from Britain in 1948 after the country’s foreign exchange hit record lows and triggered its first foreign debt default last year.
The IMF approved a bailout of nearly $3 billion in March, which Sri Lanka expects will bring additional funding of up to $4 billion from the World Bank, the Asian Development Bank and other multilateral agencies.
The island nation will release a domestic debt restructuring program this week to push forward reworking its debt with bondholders and bilateral creditors including China, Japan and India.