Sri Lanka to receive another concessionary loan of US$ 140 million from China
The government of Sri Lanka is to receive another US$ 140 million as a concessionary loan from the China Development Bank (CDB) to tide over the present financial problems, a spokesman from the Chinese embassy has said.
Out of the US$ 140 million, US$ 70 million is to be delivered by the end of the month and the remainder by the end of the year.
Acting Chinese Ambassador Hu Wei has called on Sri Lanka’s Prime Minister Mahinda Rajapaksa recently to discuss bilateral cooperation as a follow up to the telephone conversation between Sri Lankan President Gotabaya Rajapaksa and Chinese President Xi Jinping on May 13.
The embassy spokesperson has told the local media that the discussion centred on fighting Covid-19 jointly and enhancing financial, trade and investment cooperation.
The CDB had announced US$ 500 million loan two months ago and according to the Chinese Embassy in Colombo, the latest loan would be at a concessionary rate for the government to carry out its debt restructuring plan.
Also, the proposed investments in Hambantota and the Colombo International Financial City (Port City) were also discussed between the Chinese envoy and the Sri Lankan Premier.
“There will be a vehicle tyre manufacturing plant in Hambantota with a US$ 500 million investment from China,” the spokesperson has said.
OSL take: Sri Lanka’s ties with China have been moving from strength to strength during the past few years. China is one of the main financial supporters to Sri Lanka and also plays a key role in the island’s development programme. Sri Lanka also plays a prominent role in China’s Belt and Road Initiative (BRI). Chinese businesses/investors can confidently explore business/investment opportunities in Sri Lanka. Sri Lankan businesses could also explore possibilities of forming joint ventures/partnerships with Chinese businesses.
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