Sri Lanka Signs USD 500 Million Facility Agreement With China: Funds To Be Used To Fight COVID-19 Outbreak

A facility agreement of USD 500 million, with big concessional terms on both interest and tenure, was signed on 18th March between Sri Lanka Finance Ministry and the China Development Bank (CDB) in the Temple Trees, with the witness of Prime Minister Mahinda Rajapaksa, Chargé d'affaires of the Chinese Embassy Hu Wei, and Vice President of CDB Ma Xin.

The facility was urgently requested by the Sri Lankan government and supported by the Chinese side, under current financial situation in Sri Lanka and the background of fighting COVID-19 pandemic with all-out efforts. It is with a maturity period of ten years, which is the longest tenure of financing facility for Sri Lanka. The interest cost is highly competitive and favorable and linked to 6 Month USD LIBOR with a grace period of three years.

The inflow of the funding is set to be implemented by the end of March, and expected to increase the official foreign reserves of Sri Lanka to better manage the finance and fight coronavirus. The Chinese government, people and relevant financial institutes are committed to continuously provide necessary assistance to the Sri Lankan government and people within our capacities for the latter's economic and social development.

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