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Sri Lanka in talks with ADB for US$300mn credit, more from China’s AIIB, France: Treasury

ECONOMYNEXT – Sri Lanka is in talks with a raft lenders ranging from the Asian Development Bank, China’s Asian Infrastructure Investment Bank and France for budget support an official said, as the country is fighting off a Coronavirus pandemic.

“We are in discussions with the Asian Development Bank for 300 million US dollar budget support program,” Treasury Secretary S R Attygalle said.

“We are also in talks with AIIB. They may also join with ADB with top-up funding.”

Sri Lanka has started talks with Agence Française de Développement (AFD) for another loan.

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Revenues of governments around the world have been hit by lockdowns.

Sri Lanka has been fighting back against the spread of Coronavirus with aggressive contact tracing and a tight lockdown backed by curfews but the authorities have kept a tight hold on testing, preventing voluntary and private sector testing.

The cost of voluntary testing has also been pushed up with the requirement for admission in the hospital, and result contact tracers are dependent on the discovery of symptomatic index cases turning up in the hospital, which block the discovery of any asymptomatic cases that have been missed.

The World Bank is a top lender to Sri Lanka and has several ongoing programs, a part of which could be re-directed to fight the current pandemic.

Many World Bank loans also have a Contingent Emergency Response Component (CERC) where part of the project funds can be re-directed if a national emergency is declared.

The Washington-based lender had already approved a 128 million US dollar health package for Sri Lanka, a part of which could be used immediately.

Sri Lanka’s central bank has also requested International Monetary Fund loan under its Rapid Finance Instrument. (Colombo/Apr23/2020-sb).

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