Sri Lanka will seek about $1.6 billion (500 billion rupees) in extra 2026 spending to help communities recover from Cyclone Ditwah, which killed over 640 people and affected roughly 2.3 million. The government plans to use the funds for emergency relief, infrastructure repair and cash support while saying it will not raise its borrowing limit. Colombo is leaning on international support — requesting $200 million from the IMF, repurposing $120 million from the World Bank and securing a $200 million ADB loan for water-management works. Preliminary estimates put full reconstruction needs as high as $7 billion.
Sri Lanka Seeks $1.6B For Cyclone Ditwah Recovery As Parliament Prepares To Approve 500 Billion Rupee Mini‑Budget
Floods and landslides caused by Cyclone Ditwah left extensive damage throughout Sri Lanka (Ishara S. KODIKARA)(Ishara S. KODIKARA/AFP/AFP)
Sri Lanka's government has announced plans to request roughly $1.6 billion (500 billion rupees) in additional spending for 2026 to accelerate recovery from Cyclone Ditwah, which has killed more than 640 people and affected an estimated 2.3 million residents — over 10% of the population.
The government interrupted a month-long parliamentary recess to bring lawmakers back to the capital and debate what President Anura Kumara Dissanayake called the country's most severe natural disaster in recent memory. The national assembly, where the president's party holds a more than two-thirds majority, is expected to approve the mini-budget.
Planned Use Of Funds
Officials say the additional allocation will fund emergency relief and reconstruction, including rebuilding destroyed homes, repairing roads, bridges and railways, and providing cash assistance to help families restore lost livelihoods.
"We need to allocate an additional 500 billion rupees for disaster relief and reconstruction over and above the money allocated for government spending in calendar 2026," President Dissanayake told parliament.
Financing Strategy And International Support
The government has said it will not raise its statutory borrowing limit to cover the extra costs and is instead relying on external grants and concessional financing. Colombo has requested $200 million from the IMF's rapid relief window and obtained World Bank approval to repurpose $120 million from an existing project for disaster recovery.
On Tuesday, Sri Lanka secured a $200 million loan from the Asian Development Bank to finance water management — specifically to complete a canal network in the hard-hit North-Central Province (NCP) aimed at improving agricultural productivity, farmer incomes and climate resilience.
Scale Of The Challenge
Preliminary government estimates suggest the total reconstruction bill could reach as much as $7 billion. The World Bank is assessing the damage to provide a fuller picture of funding needs and recovery priorities.
Economic Context
The cyclone struck as Sri Lanka continues to recover from its 2022 economic crisis, when foreign exchange shortfalls disrupted imports of essentials. After a $2.9 billion IMF program approved in early 2023, macroeconomic stability has improved, but the disaster poses a major new fiscal and humanitarian strain.
Next Steps: Parliament is expected to vote on the mini-budget imminently, and the finance ministry will convene an international donor conference early next month to solicit grants and concessional loans.
