Sri Lanka expedites efforts of mobilising foreign financing
Sri Lanka is now expediting efforts of mobilising foreign financing in infrastructure facilities and strategic development initiatives while giving priority to essential development initiatives according to government’s policy framework document.
Arrangements have been made to mobilise foreign financing of US$633.8 million by entering into four agreements with foreign development partners and lending agencies, in the first four months to support the Public Investment Programme (PIP), a Finance Ministry report revealed.
The share of outright grants and concessional financing in the foreign financing basket has also been reduced, ministry data showed.
This total amount consists $500 million of Foreign Currency Terms Loan Facility (FCTLF) extended by the China Development Bank (CDB) as balance of payment support.
The balance foreign financing includes $58.08 million extended by the World Bank for a water resource management project and $60.96 million extended by Exim bank of Hungary for the construction of flyovers at Kohuwela and Gatambe.
However, the performance of mobilising foreign financing in the first four months of 2021 was largely affected by the COVID-19 pandemic, a senior official of the ministry said.
Total foreign financing disbursements made in the first four months of 2021 amounted to$ 856.4 million, of which $ 855.8 million was disbursed as loans while $ 0.6 million was disbursed in the form of grants.
The majority of the disbursements were from the loan agreements signed with China, which is almost 60 percent, followed by World Bank (16 percent), Asian Development Bank (ADB-13 percent) and Japan (5 percent).
Other than the loan of $500 million obtained for the balance of payment support, the majority of the disbursements was for the projects implemented under the roads and bridges sector accounting for almost 13 percent of the total disbursements.
This was followed by the water supply and sanitation sector at 5 percent, health and social welfare 5 percent, ground transport sector at 3 percent, housing and urban development 3 percent, education and training 3 percent and power and energy sector at 2 percent.
As at end April 2021, the total undisbursed balance of foreign financing available from already committed loans that are to be utilised in next 3-5 years was $ 8.39 billion.
ADB has the majority to be disbursed and the balance to be disbursed is from China, the World Bank and Japan.
Almost 20 percent of the amount is to be utilised in roads and bridges sector whereas 19 percent is for water supply and sanitation and 14 percent for the ground transport sector.