Digging Deep

The Asian Development Bank says it is not keen on offsetting debt, but is pushing for more grant aid and a re-scheduling of loans.

Sri Lanka owes the Manila based bank a total of US$ 1.6 bn in total to date, with debt repayment this year standing at US$ 75 mn.

Given the ‘extraordinary financing’ needed, the ADB says it will step in with higher grant aid, but offsetting debt should not affect its capability as a financial body to meet with other needs.

“Bilateral and multilateral agencies operate differently. In consultation with government and as we progress, we will also find out what modalities of assistance is required,” Kunio Senga, Director General of South Asia Regional Development, ADB, added.

The ADB has pledged US$ 675 mn for the region, of which US$ 500 mn is to be a mix of grants and highly concessional loans, with US$ 175 mn re-routed from ongoing projects.

Up to 15 percent of the US$ 200 mn the ADB will lend Sri Lanka this year is expected to be in grant form, going toward re-building tsunami hit areas,” ADB Country Director for Sri Lanka, Alessandro Pio said Saturday.

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