Sri Lankan government signs 19 loan agreements in first four months for development programmes
The government of Sri Lanka has reportedly signed 19 loan agreements worth US$ 2.4 billion during the first four months of the year, which is nine times higher from the US$ 266.2 million year earlier.
The Finance Ministry of Sri Lanka has stated that China led in new loan agreements signed with Sri Lanka for the first four months of 2019 with a US$ 989.5 million loan, while also leading in loans disbursed.
The country has also received US$ 8 million in grants.
However, the local media has reported that there could be more grants than listed, as the Auditor General had said that state departments independently secure grants without the knowledge of the Treasury, flouting regulations.
Accordingly, the largest loan signed was with China, to construct the Kadawatha-Meerigama section of the Central Expressway.
The 20-year loan has a concessional fixed interest rate of 2.5 percent, with a 6-year grace period.
The Asian Development Bank (ADB) was the second largest financier signing loan agreements with Sri Lanka for far in 2019 with US$ 310 million of commitments, of which US$ 300 million is for the port access elevated highway project.
Meanwhile, landslide mitigation and Colombo urban regeneration projects are set to receive US$ 280 million from the Asia Infrastructure Investment Bank (AIIB).
Also, Japan had signed a US$ 270.5 million loan for Colombo’s light rail public transport system, while France had partnered for a US$ 85 million loan for waste disposal system in the Moratuwa and Ratmalana suburbs south of Colombo.
According to the Finance Ministry, a total 66.8 percent of the new loan agreements signed were for roads, bridges and ground transport projects, while 11.2 percent was for health and social welfare, and 8.7 percent for housing and urban development.
OSL take:
The signing of 19 loan agreements and the securing of funding for Sri Lanka’s development programme is indicative of the progressing development agenda in the country. The funding commitments by bilateral and multilateral donor to Sri Lanka also indicate the level of confidence the donors have on the country’s growth potential. The availability of funds for the development programmes on the other hand opens up many business/investment opportunities to the discerning foreign business/investor. Despite the negative impact from the Easter Sunday attacks, Sri Lanka’s economy is on a continuous growth path.
| Article Code : | VBS/AT/02072019/Z_2 |