US International DFC approves $ 120 million to boost Sri Lanka’s private sector
Daily FT: The US International Development Finance Corporation (DFC) Board of Directors has approved $ 120 million in new loans to grow and support the Sri Lankan economy.
“For seventy years, the United States has provided foreign assistance, loans, and trade opportunities to help grow the Sri Lankan economy and support the Sri Lankan people,” said US Ambassador to Sri Lanka Julie Chung. She added that the latest announcement is good news for the private sector, as the DFC’s $ 120 million in new investments will reach small and medium-sized businesses and help to provide equity, jobs, and futures.
The projects announced include a $ 100 million direct loan to the Commercial Bank of Ceylon, Sri Lanka’s leading commercial private bank, to expand lending to micro-, small-, and medium-sized enterprises (MSMEs) and address the credit gap for women-owned businesses, which represent 25% of MSMEs in Sri Lanka.
In addition, DFC announced a $ 15 million loan to BPPL Holdings, a polyester yarn manufacturer incorporating recycled plastic materials. The loan will support increased production and strengthen Sri Lanka’s recycling infrastructure in support of efforts to reduce plastic waste in Sri Lanka.
Also announced yesterday was a $ 5 million loan to MA’s Tropical Food Processing Ltd., a sustainable food company, to finance its expansion and grow its supplier network. This effort will strengthen Fair Trade practices in Sri Lanka and create new jobs, with an emphasis on increasing women’s employment.
These new loans build on DFC’s existing portfolio in Sri Lanka of nearly $ 300 million in funding for the MSME sector over the past two years.
“The diverse set of transactions announced will make a real impact across a range of sectors and development challenges,” said DFC Chief Executive Officer Scott Nathan. “These transactions showcase how DFC strategically catalyses private capital where it matters most.”
Around the world, DFC partners with the private sector to finance solutions to critical challenges, investing across sectors including energy, health care, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.
Sri Lanka’s private sector is identified as the country’s engine of growth that show a continuous growth in business potential. Many private sector companies continue to post growth levels while recording profits even after facing challenges of a global pandemic and an ongoing economic crisis. The growing private sector in Sri Lanka is also looking at expanding to other areas in the region given the advantages of Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as concessions enjoyed by the country. The funds approved by the US and other donors and multilateral agencies is indicative of international confidence in the business potential of Sri Lanka’s private sector. Foreign businesses/investors could confidently explore opportunities in Sri Lanka while also looking at forming partnerships or joint ventures with local businesses.
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