EIB to lend 50 million Euros to Lanka

The Sri Lankan government is to borrow 50 million Euros from the European Investment Bank (EIB) to refinance business enterprises carrying out small and medium size projects, according to senior Finance Ministry officials said.

“Government has entered into a Finance Contract with the bank to get the loan facility to refinance projects in the industrial, productive infrastructure, tourism, mining sector and related services as well as eligible health and climate change mitigation projects, in particular renewable energy and energy efficiency,” A senior official of the Finance Ministry told the Sunday Times FT.

He said the proceeds of the credit line will be on lent to the DFCC Bank and DFCC will act as the administrative unit of the scheme, channelling the funds in local currency and monitoring the allocations to be made to business clients implementing their SMI projects. The long-term funding offered by the EIB is scarce in the local financial market. By focusing on the private's sector efforts a renewed drive for investment is expected to enhance employment creation and indirectly reduce poverty ad improve human welfare.

He added that the Cabinet has granted its approval to a Memorandum submitted by President Mahinda Rajapaksa as the Minister of Finance and Planning to enter into an agreement with the European Investment Bank towards this end. He quoted the European Investment Bank as saying that by focusing on the private sector's reconstruction efforts, a renewed drive for investment is expected to enhance employment creation and indirectly reduce poverty and improve human welfare in the island. (BS)