PRIVATE FINANCE DEVELOPMENT PROJ (PFDP)

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The project has four objectives: (a) to improve the efficiency of financial intermediation in Sri Lanka by supporting policy and regulatory reforms in the financial sector; (b) to assist in domestic resource mobilization for long-term investment by stimulating the development of local bond markets; (c) to enable the private sector to respond to the changing economic environment by providing investment finance; and (d) to help deepen the financial system and strengthen the key players. Major elements of the project are to: (a) improve the policy and regulatory framework, especially in areas affecting mobilization of domestic resources for term investment through commercial channels; (b) a credit component for financing private sector investments; and (c) a technical assistance component to: (i) provide assistance for the preparation and implementation of various policy reforms including establishing a viable bond market; (ii) prepare the state-owned commercial banks for restructuring and recapitalization; (iii) provide support for implementing new accounting and auditing standards; (iv) operationalize debt recovery courts; (v) enhance banking supervision at the Central Bank of Sri Lanka; and (vi) support implementation of the new environmental industrial standards.