China, Sri Lanka’s top lender

Nov 23, 2011 (LBO) – China has emerged as the top lender to Sri Lanka in the nine months to September 2011, in terms of money actually disbursed and loans committed for new projects, finance ministry data shows. Up to September 2011, China has disbursed 599.9 million US dollars out of a total of 1,573.9 billion US dollars.

Japan came second with 239.4 million US dollars of which 11.9 million were grants and India third with 179 million US dollars, a finance ministry report said.

Asian Development Bank disbursed 171.8 million US dollars of which 12.5 million were grants and the World Bank 166.2 million dollars of which 4.7 million were grants.

Japan has traditionally been Sri Lanka’s largest source of foreign financing. Though the financing is given at concessionary rates, the rising yen has increased the cost of past borrowings.

China is giving loans at near commercial terms through mainly from its Export Import Banks to finance Chinese project goods and construction services.

Sri Lanka has increased procurements from export import banks in recent years from other countries as well.

China also committed the most money to new projects in the nine months to September accounting for