On Tuesday, the US announced more than $5 million in additional funding to cash-strapped Sri Lanka to address the island nation’s worst-hit emergency needs. The new grant funding through the United States Agency for International Development (USAID) builds on last week’s announcement of a $6 million grant through USAID and a new $120 million loan through the Development Finance Corporation (DFC) to meet the needs of Sri Lankans during the economic crisis.

Sri Lanka is experiencing its worst economic crisis since independence from Britain in 1948. The US government on Tuesday announced the third tranche of new funding to address the urgent needs of the Sri Lankan people hardest hit by the economic crisis.

The US embassy in Sri Lanka said in a statement that the humanitarian aid totalling $5.75 million would provide cash assistance, short-term jobs and agricultural supplies such as seeds directly to people affected by the crisis to meet their basic needs. US Ambassador to Sri Lanka Julie Chung explained that the UN recently issued an appeal to international donors warning that Sri Lanka faces a multidimensional food security crisis.

The new aid we are announcing today will address some of these complexities. We are working to ensure that these funds go directly to the Sri Lankans most affected by this crisis. The announced funding will also support micro-enterprises in communities that have traditionally experienced high poverty rates and are particularly affected by the crisis. In addition, the statement said that it would provide community-based disaster management committees to help prepare for, respond to, and ultimately recover from crises.

In the coming months, the US plans to increase its ongoing major investment and assistance programmes in Sri Lanka to help its people meet their current and long-term needs. These efforts build on six decades and more than $2 billion in foreign aid to the American people, strengthening Sri Lanka’s tourism, small business, renewable energy, climate resilience and civil society.

Sri Lanka is negotiating an economic plan with the International Monetary Fund (IMF) that global banks’ lending facilities could back for the country. It plans to raise $6 billion over the next six months to keep it afloat. However, the IMF put forward some conditions to agree to the bailout package.

The nearly bankrupt country announced in April that it would suspend repayments of nearly $7 billion in foreign debt due this year and about $25 billion due in 2026 after a severe foreign exchange crisis caused it to default. Sri Lanka’s total external debt is $51 billion. The economic crisis has led to severe shortages of food, medicines, gas and other fuels, toilet paper and matches, forcing Sri Lankans to queue for months outside shops to buy fuel and gas.