China extends $ 500 m urgent financial assistance to SL

Treasury Secretary S.R. Attygalle (right) and an official of China Development Bank sign the agreement in the presence of Prime Minister and Finance Minister Mahinda Rajapaksa, Chinese Embassy Chargé d'affaires Hu Wei, and CDB Vice President Ma Xin

A facility agreement of $ 500 million with big concessional terms on both interest and tenure was signed yesterday between the Finance Ministry and the China Development Bank (CDB).

The Chinese Embassy said the facility was urgently requested by the Sri Lankan Government and supported by the Chinese side, given the current financial situation in Sri Lanka and the background of fighting COVID-19 pandemic with all-out efforts. 

It is with a maturity period of 10 years, which is the longest tenure of financing facility for Sri Lanka. The interest cost is highly competitive and favourable and linked to 6-month USD LIBOR with a grace period of three years.

The inflow of the funding is set to be implemented by the end of March, and expected to increase the official foreign reserves of Sri Lanka to better manage the finance and fight coronavirus. 

The embassy said the Chinese Government, people and relevant financial institutes were committed to continuously provide necessary assistance to the Sri Lankan Government and people within its capacities for Sri Lanka’s economic and social development.

The agreement was signed in the presence of Prime Minister and Finance Minister Mahinda Rajapaksa, Chinese Embassy Chargé d’affaires Hu Wei and CDB Vice President Ma Xin.