Govt. to ink a loan agreement with the World Bank

COLOMBO (News1st): The government will ink an agreement with the World Bank on Friday to obtain a loan worth USD 127 million to support its efforts in combatting COVID - 19, Treasury Secretary S. R Attygalle said on Wednesday days after the government failed to raise a 220 million dollar Development Bond. Treasury Secretary S.R. Attygalle told News 1st that the government has received 500 million dollars of the 1.2 billion dollar loan it got from China Development Bank and the remaining 700 million dollars tranche is expected soon. Attygalle also said that the government will not default its external debt repayments, but instead would seek a moratorium from lenders owing to the current economic impact caused by the COVID - 19 pandemic. Earlier Wednesday, President Gotabaya Rajapaksa requested the Director-General of the WHO, Tedros Adhenom, to pursue with lenders including the International Monetary Fund (IMF) and the World Bank to grant a debt moratorium for countries grappling with COVID - 19. The Treasury Secretary said that talks have been held with other multilateral lenders including the Asian Development Bank and the Asian Infrastructure Investment Bank (AIIB) seeking financial assistance. The AIIB Board of Directors is set to consider Sri Lanka’s proposal this week. Recently, the IMF announced that it is ready to lend USD 1 trillion to countries struggling with the economic impact of the coronavirus. “I do not know whether the IMF will give that size of support,” the Treasury Secretary said responding to queries raised by News1st as to whether the government will obtain financial support from the global body. The IMF, in 2016, had already approved a three-year loan worth USD 1.5 billion three-year loan for Sri Lanka. Sri Lanka’s external debt repayments for 2020 are valued at more than USD 4.8 billion, the highest amount to be repaid by the country in a year.