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The Government of Sri Lanka is planning to borrow two loans amounting to USD 150 million from the Asian Development Bank (ADB) to implement the “Responsive COVID-19 Vaccines for Recovery (RECOVER) Project”.

The proposed total financial assistance from ADB is comprised of USD 84 million under Asia Pacific Vaccine Access Facility (APVAX) and USD 66 million from the regular country allocation. The loan funds will be used to meet the cost of vaccines and also for several other associated activities including the establishment of vaccine related monitoring systems, providing cold chain related transport facilities and strengthening medical waste management. The total project cost is estimated as USD 161.85 million, out of which USD 11.85 million has been agreed to be borne by the Government.

The expected project impact is to enhance the resilience and responsiveness of the health system to curtail the COVID-19 virus spread, reduce morbidity and mortality, and the negative health, social and economic effects of the COVID-19 pandemic in Sri Lanka. The project will be implemented targeting the entire country across all 9 provinces with a special focus on protecting geographically, socially, and economically deprived population from COVID-19 and its effects. The project is scheduled to be completed by 30th June, 2024.

The relevant Loan Agreements for the Responsive COVID-19 Vaccines for Recovery (RECOVER) Project, amounting to USD 150 million were signed by Mr. S R Attygalle, Secretary, Ministry of Finance and Mr. Chen Chen, Country Director, ADB Resident Mission, on 8th July, 2021 on behalf of the Government of Sri Lanka and ADB respectively.

 

 

 

 

Bridging the urban and rural gap by providing services and infrastructure facilities equally across all segments of the country is one of the keys focuses of the Government Policy Framework. Developingtransportnetworktoensureanefficientandenvironmentallyfriendlypublictransportsystemwillsupportachievingthisenvisagedtarget oftheGovernment.

Accordingly, the Government of Sri Lanka has entered into a Framework Financing Agreement on14th August 2017 with the Asian Development Bank (ADB) to obtain a time slice multi-tranchefinancing facility up to an aggregate loan amount of USD 900 million to finance the SecondIntegrated Road Investment Program (Second, I Road Program) which is being implemented undertheMinistryofHighways.

The investment program is currently being implemented to improve the accessibility of the roadnetwork in rural areas, and thereby support rural economic and social development. Upgrading andmaintainingofabout3,400kilometers(km)ofruralaccessroadsinEastern, Northern, Uva,andWestern provinces to all-weather standards is being carried out under the Program. In addition, around 340 km of national roads between the selected rural communities and social economiccenters of the above provinces will be rehabilitated and maintained in good condition and alsoimprove the capacity of road agencies with respect to safeguards, road safety, maintenance, research capacity, and road design and construction. The overall program is scheduled to becompleted by 31st March 2027. The Government of Sri Lanka has obtained the first two tranchesamounting to USD 300 million out of the above USD 900 million to finance the ongoing contractsundertheProgram.

The Loan Agreement for the third Tranche of the Second I-road Program, amounting to USD 200million was signed by Mr. S R Attygalle, Secretary, Ministry of Finance, and Mr. Chen Chen, CountryDirector, ADB Resident Mission in Sri Lanka on 28th May 2021 on behalf of the Government of SriLankaandADBrespectively.

 

USD 500 Million Concessional Financing from the Republic of Korea

 

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                                             In order to further strengthen the economic cooperation between the two countries, the Government of Republic of Korea has agreed to provide concessional loans from the Economic Development Cooperation Fund (EDCF) of the Export-Import Bank of Korea (KEximbank).

Accordingly, the Government of Republic of Korea and Government of Sri Lanka have agreed to sign a new Framework Arrangement for the period of 2020-2022 to obtain loans through EDCF up to an aggregate commitment amount of USD 500 million to finance projects mutually agreed

The loan interest rate on this concessional loan is about as low as 0.15% -0.20% and the loan has a repayment period of about 40 years with a grace period of 10 years.

In addition, the two sides agreed to continue the Korean Exim Bank Representative Office, which was opened in Colombo in January 2016 by its Chairman, to further implement the projects in a well-coordinated manner.

The Framework Arrangement was signed today (on May 10, 2021) by Mr. S R Attygalle, Secretary, Ministry of Finance on behalf of the Government of Sri Lanka, and Mr. Woonjin Jeong, His Excellency the Ambassador of the Republic of Korea, representing the Republic of Korea.

   

 

 

Sri Lanka receives USD 80.51 million from the World Bank Group to implement the Second Additional Financing for Sri Lanka COVID-19 Emergency Response and Health Preparedness project

The COVID-19 pandemic has made an unprecedented threat on every aspect of humankind. The Sri Lankan economy was extremely affected by the COVID-19 pandemic in 2020, with a direct impact on almost every industry. However, efforts are being made to gradually reopen the economy and revitalize economic activities. Vaccination plays a critical role in the endeavor of transitioning to a new normal.


Due to the rapid increase of the COVID-19 incidence in Sri Lanka, the Government has given priority to enable affordable and equitable access to COVID-19 vaccines and to help ensure effective vaccine deployment in Sri Lanka through vaccination system strengthening and to further strengthen preparedness and response activities. The sole objective of the proposed project is to assist the Government to procure COVID -19 vaccines according to the World Bank vaccine approval criteria while covering the deployment cost of the vaccination program from its inception and, associated cost of the vaccination process.


Accordingly, Sri Lanka’s COVID-19 vaccination program aims to control outbreaks and prevent transmission at the initial stage, while gradually boosting and maintaining herd immunity. In addition to the immediate health benefits, COVID-19 vaccination could speed up the economic recovery process that will likely yield more return of investments, particularly through building confidence in the tourism sector and export sector.


Hence, the relevant Financing and loan Agreements of the aforementioned project were signed by Mr. S. R. Attygalle, Secretary, Ministry of Finance on behalf of the Government of Sri Lanka, and Mr. Faris H. Haded-Zervos, Country Director, World Bank for Sri Lanka on behalf of the World Bank on May 13, 2021.

 

Issued by the Department of External Resources on May 11, 2021.

The Government of Sri Lanka and the China Development Bank entered into an agreement on April 12, 2021 for a financing facility of USD 500 million, signed by Dr. Palitha T.B. Kohona, Ambassador of Sri Lanka to the People’s Republic of China on behalf of the Government of Sri Lanka and Mr. Wang Wei, Deputy Director General, China Development Bank on behalf of the China Development Bank.

The facility has been made available, on a request made by the Government of Sri Lanka to the Chinese Government and the China Development Bank to support the country’s development efforts.

It is noted that this is part of the Foreign Currency Term Financing Facility (FTFF) 2020 signed on March 18, 2020 where , the terms of this facility remains at 10 years with a grace period of 3 years, this is an improvement over the foreign currency term financing facility drawn down in 2018 from the China Development Bank . The financial cost of borrowing when compared to the current market conditions is competitive with the interest rate being an improvement over the 2018, China Development Bank facility with the margins over 6months LIBOR being less than that of the 2018 facility. The USD 500 million will be disbursed, during this week.

 

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