China Development Bank extends syndicated loan to Colombo by $500 million

[TamilNet, Wednesday, 18 March 2020, 22:57 GMT]
Upon the request of the SL Government, Beijing has upsized a syndicated loan with a ten-year tenure and a team from the China Development Bank (CDB) was in Colombo to sign the deal with the SL Government, the Daily Financial Times reported on Wednesday. The fresh funding from China would significantly assist Colombo in managing its debt financing, the news report opined. The latest upsizing adds a new extension to the initial $1 billion syndicated loan. The original loan was of an eight-year tenure from 2018. This has been expanded with a ten-year tenure and “more attractive terms”, the Daily FT reported earlier in the day.

The agreement was signed at the presence of SL Prime Minister Mahinda Rajapaksa at the temple trees, other media reports in Colombo said terming it as a concessional loan intended for “development”.

Mahinda Rajapaksa, who recently visited India was seeking a moratorium on all loan repayments for three years. “If the Indian government takes this step, then other governments might agree to do the same thing, including China,” he told The Hindu in an interview on 08 February.

The CDB, which is a public sector financial institution wholly owned by the Chinese government, is also one of China’s leading international funding agencies providing lower interest rates and longer-term loans than other Chinese banks. The CDB has expanded its global operations in Latin America and Africa in recent years.

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Reuters:

Sri Lanka accepts $1 billion, eight-year syndicated loan from China Development Bank

Chronology: