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India’s Exim Bank gives $403mn loan for Sri Lanka water projects

ECONOMYNEXT – The Export-Import Bank of India (Exim Bank) will lend 403.01 million US dollars to Sri Lanka’s National Water Supply and Drainage Board (NWSDB) to finance three water supply projects.

The two sides have signed Buyer’s Credit Agreements, under Exim Bank’s National Export Insurance Account, the Indian High Commission said in a statement.

Buyer’s credit is a financing mechanism that provides a safe mode of nonrecourse financing, where only the assets covering the loan are considered collateral, to Indian exporters.

It serves as an effective market entry tool to traditional as well as new markets in developing countries, which need deferred credit on medium or long term basis, the high commission said.

The three projects are the Aluthgama, Mathugama and Agalawatta Integrated Water Supply Project, the Polgahawela, Pothuhera and Alawwa Integrated Water Supply Project and the Kundesale, Haragama Water Supply Project.

Sri Lankan Minister of City Planning and Water Supply Rauf Hakeem said the projects would supply potable water to nearly one million people.