Selling to the Government

The current government announced that all public procurement will be conducted through tenders, with the only exception being government-to-government contracts. In practice, however, procurement decisions sometimes diverge from this policy. For example, the Ministry of Power recently revived a liquefied natural gas floating storage regasification unit (LNG FSRU) project that had been previously canceled and awarded it directly to a Chinese company.

The government has pledged to adhere to international procurement standards, but implementation remains inconsistent, particularly for projects and goods not funded by international financial institutions. Well-informed local agents are often critical to navigating the complex tendering process, though even well-connected firms can face difficulties. Local agents frequently represent multiple foreign suppliers, and when confronted with procurement challenges, including possible corruption allegations, they are sometimes reluctant to raise concerns for fear of jeopardizing other business interests. As a result, obtaining an objective appraisal from local agents can be difficult.

Public works projects are often financed through borrowing from multilateral development banks. For additional information, see the “Project Financing” section under “Trade and Project Financing.” Sri Lanka is not a signatory to the WTO Agreement on Government Procurement (GPA), though it has been an observer since April 2003.

U.S. companies bidding on government tenders may qualify for U.S. Government advocacy. The Advocacy Center, a unit of the U.S. Department of Commerce’s International Trade Administration, coordinates interagency advocacy efforts on behalf of U.S. exporters competing for international government contracts. The Advocacy Center works closely with the U.S. Commercial Service and interagency partners to maximize U.S. exporters’ chances of success. Advocacy assistance can take many forms, often involving the U.S. Embassy or other U.S. Government agencies directly expressing support for U.S. bidders to the host government. For more details, consult Advocacy for Foreign Government Contracts.

Financing Projects

Sri Lanka is actively seeking financing for development projects, with a strong focus on infrastructure, renewable energy, and strengthening the financial sector. In June 2025, the World Bank approved a $150 million program, “Secure, Affordable, and Sustainable Energy for Sri Lanka”, to support the country’s transition to clean, reliable, and affordable energy. The program is designed to reduce Sri Lanka’s dependence on fossil fuel imports and accelerate the shift toward solar and wind power. In November 2024, the Asian Development Bank (ADB) approved a $200 million policy-based loan to support financial sector reforms aimed at stabilizing the economy, managing the financial crisis, and laying the foundation for sustainable recovery, resilience, and poverty alleviation.

Bilateral donors also play a significant role in financing Sri Lanka’s development. India, Japan, and Germany fund major government projects through long-term concessional loans, while China continues to be a major lender for large-scale infrastructure projects. For instance, the government is currently negotiating with China for financing to restart the stalled Central Expressway project.

In addition to sovereign lending, the ADB provides direct financing to private-sector projects, while the World Bank’s International Finance Corporation (IFC) supports private-sector development through equity and long-term debt financing, including targeted support for small and medium-sized enterprises (SMEs).

Private investment in Sri Lanka is financed largely through retained profits, which account for about 70 percent of funding, with an additional 20 percent supported by short-term borrowing. The stock market and, to a lesser degree, the corporate securities market, also provide capital for investment.

U.S. Government agencies offer a range of tools to support American firms competing for projects in Sri Lanka. 

The U.S. Export-Import Bank (EXIM) partners with private lenders by providing loan guarantees, ensuring repayment of a portion of the loan if the U.S. exporter defaults. This enables exporters to secure financing to cover labor, materials, and inputs for fulfilling contracts. EXIM also provides export credit insurance (https://www.exim.gov/).

The U.S. Trade and Development Agency (USTDA) provides funding for feasibility studies, orientation visits, training grants, business workshops, and technical assistance to help U.S. firms compete for infrastructure and industrial projects (https://ustda.gov/).

The U.S. International Development Finance Corporation (DFC), an independent U.S. Government agency, provides financing for private development projects, including loans, equity investments, and political risk insurance (https://www.dfc.gov/).
The U.S. Small Business Administration’s (SBA) Office of International Trade supports small businesses engaged in international trade by coordinating with other federal agencies and public- and private-sector organizations. The SBA provides tools and programs to encourage and facilitate small business exports (https://www.sba.gov/).

Multilateral Development Banks and Financing Government Sales

Price, payment terms, and financing are often decisive factors in winning government contracts. Many governments finance public works projects by borrowing from Multilateral Development Banks (MDBs). MDBs play a central role in development financing by channeling resources to high-impact projects in regions where traditional financing options are limited. Their ability to attract co-financing from private investors and national governments expands their reach and impact, creating opportunities for large-scale infrastructure projects, social development programs, and green initiatives. For additional guidance, see the ITA Guide to Doing Business with the MDBs. 

The U.S. Department of Commerce’s International Trade Administration (ITA) maintains Foreign Commercial Service Officers at each of the five major MDBs: the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the World Bank. U.S. firms can access information and guidance through the Commercial Liaison Offices to the Asian Development Bank and to the World Bank.