Sri Lankan government negotiating new US$ 1 billion plus loan from China
A senior official of the Central Bank of Sri Lanka has reportedly said that the government of Sri Lanka is in the process of negotiating a new loan from China, which could be as much as US$ 2 billion. The official has noted that the loan is likely to be finalised over the next few weeks.
Senior Deputy Governor Dr. Nandalal Weerasinghe has told reporters in Colombo that the Sri Lankan government is negotiating a loan from the Chinese Development Bank and that at least part of it could be used for refinancing requirements this year.
Sri Lanka has to repay a total of US$ 4.8 billion this year, with the next large payment of US$ 1 billion due in September.
“The Government has a clear borrowing plan for the year, and under that they are already working on a loan from China Development Bank, and we understand that has made good progress and that may materialise in a couple of weeks. After the elections and the Budget is presented, there will be a borrowing plan for next year and even for the second half of this year. The indication is that the Chinese loan could be between US$ 1-2 billion, but the final number has not been finalised. This is within the borrowing limit set out in the Vote on Account,” Dr. Weerasinghe has been quoted as saying in the local media.
OSL take:
Sri Lanka is currently engaged in an aggressive development programme that covers all key economic sectors. Given the expansion in the country’s economy, foreign bilateral and multilateral lenders are considering fund allocations to Sri Lanka as a positive gesture. Foreign businesses/investors could therefore explore business opportunities in Sri Lanka’s development programme. Also, Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements as well as trade concessions enjoyed by the country have made it an attractive business destination in the South Asian region.
| Article Code : | VBS/AT/20200311/Z_1 |