The Manila-based lender plans to raise Sri Lanka’s annual allocation to $300 million in 2010 from $200 million, to fund road, power and water and sanitation projects in the island’s north and east, among others, said Narhari Rao, the ADB’s South Asia lead economist.

“Sri Lanka is in an extremely favorable situation and the overall confidence of the international community is much higher,” Rao said in an interview in Colombo. “We are trying to push ahead on various fronts since we feel it’s just the right time to give resources to Sri Lanka.”

The International Monetary Fund this week said it reached a staff-level agreement for a $2.5 billion standby loan for Sri Lanka to rebuild its economy and replenish international reserves.

Rao said the ADB’s Board may also this year approve a $300 million “special facility” to Sri Lanka to help it better face the global recession and set up a $20 million fund in 2011 to support public-private partnerships.

Rao said Sri Lanka could increase its rate of economic growth to at least 7 percent in the next year or two, “contingent on the global scenario.”

The government of the Russian Federation also has contributed US$500,000 to the budget of the Office of the United Nations High Commissioner for Refugees (UNHCR) to be earmarked for UNHCR programmes in Sri Lanka aimed at addressing the current humanitarian needs in the country.

Following the surge in displacement in the north during the first half of this year, Brazil too has contributed US$500,000 to the UN Refugee Agency (UNHCR).