Lanka to get two financial aid packages of $900 mn from India this month
Two financial aid packages from India amounting to $ 900 million are set to be delivered to Sri Lanka this month, a news report said.
The Sunday Morning, quoting Indian government sources, said that a US$400 million swap facility and a $500 million credit line for fuel would both reach Sri Lanka this month. One of the packages is set to be delivered to the island’s coffers by January 10. Sri Lanka’s foreign reserves have reached a dangerous low.
“India will release the three requests for financial assistance presented by the Government of Sri Lanka. However, it is difficult to give the exact dates of the disbursements,” the source told the paper.
When questioned about the delay in disbursing the financial assistance, the source explained that the Indian Government had stopped credit lines for commodities and had to recommence the process once the Sri Lankan Government had presented such requests to the Indian Government. “This is the main reason for the delay,” they said.
The US$ 1 billion facility sought by the Sri Lankan Government will take more time due to the documentation process, it is learnt.
However, the source downplayed whether the Indian financial support was being delayed pending a positive nudge from the Sri Lankan Government, like the agreement to jointly develop the Trincomalee Oil Tank Farm. Energy Minister Udaya Gammanpila last week announced that Sri Lanka and India would jointly develop the oil tanks while the lease of the Lanka Indian Oil Company tanks was also extended by another 50 years. Apart from the $ 400 million swap facility, Sri Lanka has sought a $ 500 million credit line for fuel and a $ 1 billion credit line for food and medical purchases.
Finance Minister Basil Rajapaksa is to make his second official trip to India starting January 10. Sri Lanka’s low foreign reserves last week received a boost with the receipt of a Yuan 10 billion (equivalent to $ 1.5 billion) facility that was signed last March. The Chinese facility is to be utilised to pay Chinese import bills.