Dear Denmark

Denmark on Tuesday said it would defer some Rs. 80 million (approx US$ 800,000) in bilateral loans to Sri Lanka for one year, in a follow up to an agreement with donors in June this year. Denmark on Tuesday said it would defer some Rs. 80 million (approx US$ 800,000) in bilateral loans to Sri Lanka for one year, in a follow up to an agreement with donors in June this year. A Finance Ministry statement said the debt deferred by Denmark will be repaid in seven equal successive and semi annual installments, with the first due on 2006 and the last on December 2009.


Danish loans are free of interest and there will be no interest charge on the deferred amount, the statement said.


A memorandum of understanding signed between Sri Lanka and the Paris Club donors in June, agreed to defer debt service payments for a year or more – allowing Sri Lanka to divert the funds for tsunami reconstruction.


G8 members waived off US$ 250 million due in interest payments this year. Most of the deferment is for a one year span.


The government was due to pay some $580 million for debt amortization and service in 2005, including amounts due to international lending institutions.


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