EIB to expand lending to Sri Lanka as EU relations improve
ECONOMYNEXT – European Investment Bank is looking to provide loans for hard infrastructure and small and medium enterprise development as part of an expansion of operations amid strengthening relations with the European Union, officials said.
EIB Vice President Andrew McDowell met Prime Minister Ranil Wickramasinghe and Finance Minister Ravi Karunanayake during what was described as the first high level delegation to visit Sri Lanka.
EU Ambassador Tung-Lai Margue said the EU was expanding economic support to Sri Lanka as political ties also strengthened.
He expected a positive outcome on restoring GSP+ trade benefits to Sri Lanka.
EU could also provide grants in ‘blended financing’ to combine with EIB’s loans, Ambassador Margue said.
EIB had earlier provided 50 million Euros for a waste water and sanitation project covering the Colombo south catchment area following a meeting with Minister Karunanayake in Brussels.
McDowell said EIB was working on financing a similar project in for north Colombo.
Following a meeting with Prime Minister Wickramasinghe, who was keen to support private sector development, he said a EIB would look at a small and medium enterprise re-financing facility which will be re-distributed by domestic banks.
Sri Lanka has high interest rates due to a large budget deficit and money printing, which requires higher-than-usual interest rates to contain inflation and to avoid balance of payments trouble. (Colombo/Mar29/2017)