China Development Bank team in town to sign new $ 500 m funding

Wednesday, 18 March 2020 01:21 - - {{hitsCtrl.values.hits}}

A team from the China Development Bank (CDB) will be in town today to sign a new funding line for Sri Lanka.

CDB in 2018 extended a $ 1 billion syndicated loan of an eight-year tenure. This week it will upsize this support with a fresh extension of $ 500 million with a 10-year tenure and more attractive terms, the Daily FT learns. The amount is within the borrowing limit set out in the Vote on Account.

The Chinese bank is likely to further increase the support by an added $ 500 million or more in the medium term upon the request of the Sri Lankan Government.

Analysts said the fresh Chinese funding will significantly help the Government in managing its debt refinancing.

Sri Lanka has to repay a total of $ 4.8 billion this year, with the next large payment of $ 1 billion due in September.

After the conclusion of the 25 April General Elections, via a proper 2020 Budget, the Government is expected to articulate its borrowing and debt servicing program for rest of the year as well as for 2021.