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Debt-Ridden Sri Lanka to Seek New Help From World Bank

The announcement follows news that Sri Lanka has extended a credit line with India by $200 million in order to procure emergency fuel stocks


Sri Lanka protest
Rampant inflation and shortages of imported food, fuel and medicines has led to weeks of sporadically violent protests. File photo: AFP.

 

Sri Lanka will seek additional loans of $300 million to $700 million from the World Bank, the island’s finance minister said on Wednesday.

Ali Sabry also told parliament that he expects to bring in a new budget after deciding that the current plan was unsustainable.

The announcement follows news that Sri Lanka has extended a credit line with India by $200 million in order to procure emergency fuel stocks.

Separately, China said it supported Colombo’s efforts to restructure its debt.

Sri Lanka was also in talks with New Delhi over extending the credit line by an additional $500 million, power and energy minister Kanchana Wijesekera told a news conference, with four fuel shipments due to arrive in May.

Hit hard by the pandemic and short of revenue after President Gotabaya Rajapaksa’s government imposed steep tax cuts, the island nation is now also critically short of foreign exchange and has approached the International Monetary Fund (IMF) for an emergency bailout.

Rampant inflation and shortages of imported food, fuel and medicines has led to weeks of sporadically violent protests.

Sri Lanka used $400 million of the $500 million credit line extended by India earlier this year, on multiple shipments in April,  Wijesekera said. Two fuel shipments will be paid for from the remaining funds in May.

 

  • Reuters, with additional editing by George Russell

 

 

READ MORE:

World Bank Preparing $500m Aid Package, Sri Lanka Says

 

UN Group Pitches Basic Income Proposal to Sri Lanka – FT

Sri Lanka Bondholders Face Painful Debt Restructuring Hit

AF TV – Explained: Why is Sri Lanka buried under $35bn of debt?

 

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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