Foreign aid still to come in for SL’s COVID-19 recovery
While Sri Lanka’s traditional development partners and international donor agencies have pledged over US$730 million to help in the COVID-19 economic recovery, only $225 million has been realised so far, official sources revealed.
However a senior Treasury official assured that the disbursement of this financial assistance in terms of concessionary loans and grants provided by the US, China, World Bank, ADB, IDA and EU will be made within the next few months.
Cabinet spokesman Minister Bandula Gunawardena told journalists at this week’s cabinet news briefing that according to a report presented to the cabinet by
Prime Minister Mahinda Rajapaksa, friendly countries and donors have provided $225 million in cash and kind to tackle the coronavirus crisis.
According to official data, World Bank had made a financial commitment of $128.6 million to COVID-19 Emergency Reaction and Health Sector Preparation Project.
In addition an IDA Credit of $87.24 million and an additional Pandemic Emergency Financing Facility of $1.72 million have been pledged. The credit facility has a maturity of 30 years and a grace period of five years.
China has also granted Sri Lanka a concessionary loan of $500 million, upon request, to aid its efforts to combat
COVID-19 while the total US contribution towards this end was $5.8 million.
The Asian Development Bank (ADB) has approved a $3.6 million grant from its Asia Pacific Disaster Response Fund to further assist Sri Lanka while the European Union (EU) has provided a grant of Euro 25.5 million ($28.56 million).
Meanwhile the country’s foreign debt has ballooned to $55 billion and it will have to pay $3.2 billion for loans and interest in the coming months, followed by $13.8 billion for debt service from 2021 to 2023.
Encumbered with massive debts, and facing a financial crisis triggered by COVID-19, Sri Lanka is trying to reach out to the international capital market for funds while maintaining the traditional source of financing such as Official Development Assistance.
This was in addition to access to new lenders such as the Asian Infrastructure Investment Bank.
In the meantime, there is also a quantum of funds pledged last year for disbursement in coming years. As at December 31, 2019, the total balance of foreign financing available from the already committed loans that are to be utilised in the next 3-5 years, was $9,688.9 million.
The majority of the money came from the loan agreements signed with China, which is almost 40 per cent, followed by ADB (17 per cent), World Bank (11 per cent), and Japan (11 per cent).