Japan to give budget support to Sri Lanka; loan US340mn for power and water

ECONOMYNEXT – Japan fund a 38 billion yen (340 million dollar) expansion of Sri Lanka’s power and water supply system and also provide a budget support loan, a statement following a meeting with President Maithripala Sirisena and Prime Minister Shinzo Abe said.

The power loan will be used to construct transmission lines in Sri Lanka’s former war torn Eastern Province and the North Central Province, the home district of President Sirisena.

A transmission line to carry power from planned power plants in Sri Lanka’s Eastern Province to the capital will also be provided.

In addition to the 38 billion yen project loan a budget support loan "which supports policy and institutional reform in macro-economic and public financial management, as well as the promotion of the private sector," will be provided. The loan amount was not disclosed.

Sri Lanka was expected to get several budget support loans from the World Bank, Asian Development Bank, Japan and Korea in tandem with a deal with the International Monetary Fund to fix the islands’ finances which were damaged in a January 2015 revised budget.

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