Feb 28, 2021

Beijing-based AIIB approves US$180mn loan to Sri Lanka for COVID-19 response Featured

The Beijing-based Asian Infrastructure Investment Bank (AIIB) has approved a US$180 million loan to Sri Lanka under its COVID-19 Emergency and Crisis Response Facility.

The decision was conveyed to Sri Lanka’s Ambassador Palitha Kohana during a meeting on Friday with AIIB Vice President D. J. Pandian in Beijing. The ambassador was informed that the bank was ready to fund the suspended Light Rail Transit Project in Sri Lanka.

According to the meeting’s details faxed to Presidential Secretary P.B. Jayasundera and copied to Treasury Secretary S.R. Attygalle (among other recipients) by the embassy, this facility will be disbursed through the Bank of Ceylon and the People’s Bank.

During the meeting, Dr. Pandian requested the embassy to inform the private sector of this facility and also “encouraged the private sector to access the extensive funding available for the renewable energy sector, including solar and wind power”.

He has said that solar power generation now costs only US$3 cents per unit and that the AIIB has enough funds to provide assistance to the private sector to develop renewable energy power sources at low rates.

Dr. Pandian said that if such projects were undertaken by the private sector, 35 percent of the project cost would be covered (by the AIIB) while in the case of a government entity undertaking this project, 80 percent of the project would be funded by the AIIB.

The AIIB Vice President also explained that the bank’s funding would be available for water projects, and electric public transport because the current emphasis at the bank was on renewable energy.

He said the bank would also be happy to fund Sri Lanka’s Light Rail Transport project, which has been suspended due to a lack of funds

Ambassador Kohonna noted the absence of Sri Lankans on the staff of the AIIB and urged the Finance Ministry to encourage more Sri Lankans to apply for positions in the bank given that Sri Lanka was a founding member of the bank.

The AIIB founded in January 2016 is a multilateral development bank that aims to improve economic and social outcomes in Asia. The bank currently has 103 members and 21 prospective members from around the world.

(The Sunday Times)