roparco, a French development finance institution, has allocated a US $ 60 million credit line to National Development Bank PLC (NDB), with an additional US $ 15 million from its Dutch counterpart, FMO, under a joint facility to support the financing of projects in the renewable energies, agro-industry and water supply sectors.
The signing of the loan agreement took place in Rotterdam in the Netherlands on September 29, 2014 by NDB Deputy Chairman Ashok Pathirage together with Chief Executive Officer Rajendra Theagarajah.
NDB was founded in 1979 by the national authorities as the country’s development bank and started developing on the retail market in 2001. It now offers all the services of a universal bank but retains its DNA as a development bank, which makes it an ideal partner to support projects that contribute to sustainable growth and job creation in Sri Lanka.
Proparco’s financing package is a validation of our country and of NDB’s successful scaling up of its loan portfolio across the country
NDB enjoys real expertise in financing long-term projects (18 percent of its portfolio), particularly in the renewable energies sector. Since 1997, it has supported 26 mini-hydro projects and half of the eight wind farms in Sri Lanka.
NDB is also very active in supporting small and medium enterprises (SMEs), for which it has developed a specific range of banking products. Over 3,000 projects were financed in 2013.
This credit line provided by Proparco and FMO will finance projects in the renewable energies, agro-industry (particularly tea and rubber plantations) and water supply sectors that require long-term financing, which is in short supply on the local market and are among the key sectors for the national economic strategy (Unstoppable Sri Lanka 2020).
The support for independent power producers (hydro, wind or biomass) will meet the strong growth in the country’s electricity needs, while limiting its heavy dependence on fossil fuels, which weigh on its budget deficit (oil accounts for 25 percent of total imports) and its carbon footprint.
In terms of water supply, due to sustained efforts over the past decade, Sri Lanka is one of the first countries in the region to have achieved Goal 7 of the Millennium Development Goals (MDGs). In order to reach universal coverage by 2020, the sector remains a priority for the government, which has launched regulatory reforms with the aim of creating a climate conducive to investments in water supply and sanitation services.
“Proparco welcomes the signing of this co-financing with FMO to support an institution that is committed to the main areas of sustainable development. With strong growth in Sri Lanka’s financial sector, this financing will contribute to reinforcing the local financial system,” said Deputy CEO in Charge of Investments Marie-Hélène Loison.
“Proparco’s financing package is a validation of our country and of NDB’s successful scaling up of its loan portfolio across the country,” said NDB Director and Chief Executive Officer Rajendra Theagarajah.
“The long-term tenor of the syndication enables us to pass on this benefit to our clients.”