Injuries affect mainly the young male population and account for 15 percent of all registered deaths and for approximately 18 percent of all public hospital admissions annually.
Kumari Vinodhani Navaratne, World Bank senior health specialist said developing a modern health management system, quality assurance and co-ordination between institutions was needed to address changing health needs of the country.
Out of the loan 190 million US dollars will be used to implement a recently prepared national health development plan 2012-2017 and 10 million US dollars will be used to improve efficiency, monitoring and capacity building.
Country director Diarietou Gaye said a modernized health system employing international standard will improve living standards and also help move towards a knowledge economy and sustained growth as envisaged in a government strategy.
The International Development Association window loan comes at 1.25 percent interest, a grace period of 5 years and 20-year repayment.
The project is targeting those vulnerable to under-nutrition, maternal and childcare problems, and communicable diseases such as tuberculosis, dengue, leptospirosis, rabies and HIV/AIDS.
The project will also help persons with acute and chronic non-communicable diseases like injuries, heart diseases, strokes, hypertension, diabetes mellitus, cancers and mental disorders.
"An increasing proportion of the population is suffering from non-communicable diseases and this increase is associated with a rapidly changing age distribution, economic development, urbanization, increased motorization and lifestyle changes," the World Bank said.
"Sri Lanka is also in the midst of a nutrition transition whereby both over-nutrition and under-nutrition coexist, sometimes even in the same family."
During the past half century the proportion of deaths due to cardiovascular diseases has increased from 3 percent to 24 percent while those due to infectious diseases have decreased from 42 percent to 20 percent.
Mental health related illnesses have become more significant. Cancers of the breast and the cervix have become the commonest type in women, and those in the oral cavity among men.