Wednesday, December 6, 2023

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Govt seeks bilateral donor aid  specially from India offering state assets        

The Sri Lanka Government is approaching bilateral partners for assistance to deal with the current economic crisis in the form of loans and currency swap facilities,Finance Ministry sources said.   

Bangladesh has extended US$ 200 million currency swap facility. China extended US$ 1.5 billion swap facility. 

Sri Lanka has also received US$ 700 million from China Development Bank. India has so far committed financial assistance to the tune of US$ 2.4 billion.

 It includes: (a) US$ 400 million under the SAARC currency swap arrangement; (b) deferral of A.C.U. settlement of US$ 515.2 million by two months; (c) US$ 500 million for importing fuel from India; and (d) US$ 1 billion for importing food, essential items, and medicine.

 In addition to this, Indian Oil Corporation has supplied 40,000 Metric Tonnes of fuel on 60 days credit.

 As part of the financial assistance package, India has also agreed to positively contribute to enhance Sri Lanka’s energy security by signing an MoU to jointly develop the Trincomalee oil tank farms.

Indian government will be  providing all kinds of assistance to tap Indian tourists for strengthening Sri Lanka’s tourism sector as well as enhancing Indian investments in Sri Lanka.

 Pakistan and Qatar have also agreed to provide assistance. Pakistan has agreed to extend US$ 200 million credit lines to import cement, basmati rice and medicines manufactured in Pakistan. 

Details of these assistance  are yet to be finalized between the two countries. Reportedly, the Central Bank has commenced discussions with the Qatar Central Bank to obtain a swap of over US$ 1 billion.

One agreement entered into in Colombo on Friday is a Joint Venture and Shareholders’ Agreement (JVSHA) for the Trincomalee Power Company Ltd (TPCL) through which National Thermal Power Corporation (NTPC) Ltd from India and the Ceylon Electricity Board (CEB) will develop a 100MW solar power plant at Sampur in Trincomalee.

While it was not announced, the CEB also signed a Memorandum of Understanding with India’s Adani Green Energy Ltd to develop a 500MW wind power project in Mannar with  an investment fo around US$ 500 milion . 

. It is already in a joint venture with the Sri Lanka Ports Authority and John Keells Holdings to develop and operate the West Container Terminal in the Colombo Port.

The Sampur JVSHA is an amended version of the JV agreement signed between the NTPC and the CEB in 2011 for setting up the Trincomalee Coal Power Plant to build and operate the now-cancelled Indian coal power plant in Sampur.

India has called for a road map from Sri Lanka on how it is going to overcome its economic crisis in the long term while also making a long list of economic cum strategic demands for implementation in the North and the East of Sri Lanka.

These demands involve a string of maritime security agreements that will strengthen India’s strategic interests, particularly around the Eastern Trincomalee harbour. 

These include Donier surveillance aircraft for the Sri Lanka Air Force and a ship repair dock for Sri Lanka Navy in Trincomalee

One of the key pressure points from the Indian Government was to start a solar power project in Sampur. 

India also wants to enter into the renewable energy field in the Delft islet after it scuttled a Chinese company securing the project following an Asian Development Bank (ADB) tender procedure.

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