ECONOMYNEXT – Sri Lanka’s Treasury is to guarantee a 3.7 billion rupee loan from state-run Bank of Ceylon to the Water Board to pay for a water supply project in towns east of Colombo.
The contract for the project, scheduled to be completed in 2017, has been awarded to Maga Engineering Ltd., according to the Ministry of National Policies and Economic Affairs.
The Cabinet of Ministers approved a proposal from the National Water Supply and Drainage Board to get a loan from the Bank of Ceylon amounting to 3.7 billion rupees, plus provisional sum of 793 million rupees and 10 percent contingency of 366 million rupees.
The ministry said the Cabinet approved the loan request and Treasury guarantee.
Interest on the loan is equal to Sri Lanka’s 6-month average weighted prime lending rate to be reviewed twice yearly plus a 2.25 percent margin a year.
Interest is to be serviced half-yearly and the loan has a repayment period of 14 and a half years including a grace period of two and a half years.
The National Water Supply and Drainage Board is expected to service and repay the loan using its own self-generated funds, the ministry said. (Colombo/October 23 2015)