Cyclone Ditwah: Sri Lanka allocates $1.6 billion for reconstruction
The Sri Lankan government announced on Thursday a massive financial plan to allocate $1.6 billion (500 billion rupees) in the 2026 budget to fund the reconstruction of the severely damaged island. This urgent move comes in the wake of the devastating Cyclone Detwah , which struck the country last November, leaving behind a major humanitarian and economic tragedy.
Official statistics revealed that the cyclone claimed the lives of more than 640 people, while its devastating effects affected about 2.3 million people, a figure that represents more than 10% of the country's total population, placing the government before unprecedented logistical and humanitarian challenges to secure shelter, food, and infrastructure rehabilitation.
Disaster repercussions and the economic context
The floods and landslides caused widespread destruction across Sri Lanka, damaging road networks, electricity, and homes.
This natural disaster comes at a particularly sensitive time for the Sri Lankan economy, which is still recovering from previous economic crises. The estimated $1.6 billion cost of reconstruction is further straining the national budget, especially given Sri Lanka's location in a region prone to extreme weather events. However, Cyclone Detwah has been classified as the most complex disaster due to the vast geographical area affected and the high population density in the disaster-stricken regions.
In this context, the government called for an emergency parliamentary session on Thursday, ending a month-long political truce, to discuss the aftermath of what President Anura Kumara Dissanayake described as “the most complex natural disaster to hit the island.” Addressing parliament, Dissanayake said, “We must allocate an additional 500 billion Sri Lankan rupees ($1.6 billion) for relief and reconstruction, on top of the 2026 general spending budget.”.
International Financing and Support Strategy
President Desanayake expressed his desire to provide direct cash assistance to residents who have lost their livelihoods, particularly farmers and fishermen whose sectors have been severely affected. The National Assembly is expected to approve this budget on Friday, a move demonstrating national consensus on the priority of disaster response.
In a notable sign of the government's commitment to fiscal discipline despite the crisis, Dessanayake affirmed that the government does not intend to raise the public debt ceiling to cover these expenses, but will instead rely on reprioritization and foreign aid. The president had previously indicated his heavy reliance on international support, and the Ministry of Finance announced on Wednesday that it is arranging an international donors' conference in early January to mobilize the necessary resources.
On the international front, the government formally requested $200 million from the International Monetary Fund through its Rapid Financing Instrument and Emergency Relief Fund. Colombo also secured World Bank approval to reallocate $120 million in previously allocated aid to other projects, directing it immediately to help the country recover from the cyclone's devastation. This reflects the international community's response to the scale of the destruction caused by Cyclone Ditwah.
