Thu, 28 Mar 2024 Today's Paper

SL’s foreign financing undergoes major shift

By

10 June 2013 03:04 am - 0     - {{hitsCtrl.values.hits}}

A A A

The composition of Sri Lanka’s foreign financing has undergone a major shift from concessional to non-concessional loans in 2012 with the country’s graduation to a middle income country, the latest Finance Ministry annul report showed. Up to 2011, the majority of the foreign financing came in the form of concessional loans from multilateral financing institutions and bilateral development partners and in 2012 the trend was reversed with nonconcessional financing consisting of the major part of foreign financing. (Refer chart)

As the annual report noted, the amount of concessionary loans in the annual loan portfolio has declined gradually from US$ 2.6 billion in 2006 to US$ 1.5 billion in 2012 while nonconcessional financing has increased from US$ 260 million to US$ 1.7 billion during the same period in the recent past.

According to the Finance Ministry, the concessional assistance from western bilateral partners in the Europe has diminished significantly and financing in the form of export credit has taken prominence.

The global economic downturn as well as the recent Euro Zone crises have also underpinned the reduction of concessional financing to low income countries in general.

Showing a similar pattern, concessional financing from multilateral partners has also come down over the past few years.

As a result, the Sri Lankan government has approached the non-concessional window of the World Bank, International Bank for Reconstruction and Development (IBRD) to expand financing options.

As access to concessional financing is limited, the government has gradually moved towards mobilizing long-term funds with maturity generally exceeding 15 years and is channelling such funding to finance infrastructure development projects.

As the annul report noted, the non-concessional borrowing was carried out to implement commercially-viable development projects “which can generate sufficient cash flow to service the respective loans.”

During the last few years, Sri Lanka saw the construction of a brand new port in Hambantota, an airport in Mattala and an expressway linking Colombo and Galle, with a few more expressways currently underway.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

  Comments - 0

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment





Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

VAT increase: SOUNDs death knell for publishers, readers

Though the Government imposed VAT (Value Added Tax) on vegetables and other e

How female change-makers are driving Sri Lanka’s energy saving platform

Saving energy has become more of a responsibility than a habit in today’s c

A dull Ramadan awaits Muslims amidst the Soaring Cost of Living

In the coming days, Muslims across the world will welcome the Holy Month of R

New wildlife underpass to curtail HEC

As of February 2024, Sri Lanka lost another 38 elephants as a result of the H