Author Topic: Sri Lanka accepts a US$1 billion, eight-year loan from China Development Bank  (Read 440 times)

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Sri Lanka accepts a US$1 billion, eight-year loan from China Development Bank
Sri Lanka accepted the eight-year syndicated loan to repay loans maturing this year, finance ministry officials said

PUBLISHED : Saturday, 26 May, 2018, 7:24am
UPDATED : Saturday, 26 May, 2018, 11:21pm

https://www.scmp.com/news/china/money-wealth/article/2147903/sri-lanka-accepts-us1-billion-eight-year-loan-china

Sri Lanka has accepted an eight-year China Development Bank $1 billion syndicated loan to repay loans maturing this year, two top Sri Lankan Finance Ministry officials said on Friday.

The bank was chosen from among four bidding for the loan, which the government plans to use towards repaying other loans, one official said.

“All three others had three-year tenure and only China Development Bank had a bid for an eight-year tenure. The effective rate of return is around 5.3 per cent,” the official said.

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The government is also preparing to refinance big debts that fall due up to 2022, with the start this year of repayments on expensive infrastructure foreign loans.

The government has blamed “colossal borrowing” by the previous government for the spike in debt servicing.

Finance Minister Mangala Samaraweera said last week the debt crisis would further worsen next year, when US$4.3 billion has to be paid for debt servicing in 2019.

Some 77 per cent of the next year repayments are for debts obtained by the previous government, he said.

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The cabinet has approved plans to borrow some US$5 billion in 2018 to refinance the debts due this year.

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