China the largest lender to Sri Lanka

The Government has made arrangements to mobilize foreign financing of US$ 742.8 million by entering into 11 agreements with foreign development partners and lending agencies from January 01 to August 31, 2020, to support the public investment program, the fiscal  management report 2020-21  released by the Finance Ministry said.

This consists of US$ 500.0 million of Foreign Currency Term Financing Facility extended by the China Development Bank for budget support purposes and US$ 128.6 million extended by the World Bank to be utilized for COVID-19 Emergency Response and Health Systems Preparedness project plus grants extended by Japan (US$ 7.6 million), Germany (US$ 12.5 million), the Asian Development Bank (US$ 3.0 million) and the United Nations High Commissioner for Refugees (US$ 0.02 million).

The performance of mobilizing foreign financing during the period was adversely affected by COVID-19 pandemic.

Total foreign financing disbursements made during the period from January 01, to August, 31, 2020 amounted to US$ 1,352.2 million, of which, US$ 1,320.9 million was disbursed as loans while US$ 31.3 million was disbursed by way of grants.

The majority of the disbursements were from the loan agreements signed with China, which is almost 50 percent, followed by World Bank (15 percent), Asian Development Bank (14 percent), and Japan (9 percent).

Other than the US$ 500 million obtained as a budget support loan, the majority of the disbursements was in lieu of the projects implemented under the roads & bridges sector accounting for almost 17 percent of the total disbursements, followed by the ground transport sector at 11 percent, water supply and sanitation sector at 9 percent, and disaster management (4 percent).

As at August 31, 2020, the total undisbursed balance of foreign financing available from already committed loans that are to be utilized in next 3–5 years, was US$ 8,737 million. China has the majority of the balance to be disbursed followed by Asian Development Bank, Japan and the World Bank respectively.

Almost 25 percent of the CUB to be utilized in roads and bridges sector whereas 18 percent is for water supply and sanitation and 14 percent for ground transport sector.

By the end of August 2020, total outstanding external debt of the Government was US$ 35.3 billion. Total debt service payments from January 01, to August 31, 2020 amounted to US$ 2,292.7 million. of which, US$ 1,348.6 million was in lieu of principal repayments and the balance US$ 944.1 million for the payment of interest.

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