ADB steps in to meet Sri Lanka’s funding gap
View(s):Negotiations are underway with the Asian Development Bank (ADB) and some other multilateral development banks (MDBs) to tackle the country’s economic woes arising of the COVID-19 pandemic, official sources said.
Sri Lanka is still to receive the substantial funding from MDBs as at the end of July. These institutions have so far pledged US$386 million to the country.
The Government is seeking $165 million from the ADB under its budgetary support programme amid already high public debt and external refinancing needs, a senior official revealed.
The Treasury is expected to receive $100 million as immediate financial relief and the balance $65 million during the first quarter next year.
In addition the cabinet of ministers approved the $400 million investment programme with ADB funding for the period 2020-2025 to implement the educational reforms under the ‘Vision of Prosperity’ National Policy Statement.
ADB will continue to maintain a strong pipeline of projects, committing an average of $800 million annually in sovereign loans to Sri Lanka under the country partnership strategy, 2018–2022.
Sri Lanka’s total foreign debt is approximately $55 billion, which accounts for nearly 80 per cent of its GDP, according to latest official figures.
Of that, China and the ADB each hold about 14 per cent, Japan accounts for 12 per cent, the World Bank holds 11 per cent, while India holds about 2 per cent.
The government has made arrangements to obtain foreign financing of $628.6 million by entering into three agreements with foreign development partners and lending agencies from January 1 to April 30, 2020 to support the Public Investment Programme (PIP).
This included $500 million of Foreign Currency Term Financing Facility (FCTFF) extended by the China Development Bank for budget support and $128.6 million extended by the World Bank to be utilised for the COVID-19 Emergency Response and Health Systems Preparedness Project, Treasury data showed. (BS)