Rail Finance

Feb 07, 2010 (LBO) – Sri Lanka is financing the purchase of rails to re-build tracks in the former war-torn eastern areas with loans from Hatton National Bank and UniCredit Bank of Austria, a senior minister said. There will be a commitment fee of 5 percent on the undrawn balance of the loan and a management fee of 0.5 percent of the loan.

Sri Lanka’s ministry of transport has signed a 8,955,653 Euro deal with Voestalpine Schienen Gmbh of Australia to buy rails to upgrade the eastern railway, on January 28.

UniCredit Bank of Austria will finance 85 percent of the contract under a Austrian government export credit scheme and the balance 15 percent will come from Sri Lanka’s Hatton National Bank, information minister Anura Yapa told reporters.

UniCredit Bank will loan 8.5 million Euros including 887,695 euro to cover an export credit insurance premium to be paid to OeKB of Austria, at a premium of 2,375 percent over the 6-month Euro interbank offered rate.

It will be repaid in 17 semi-annual installments starting 21 months after the export facility comes into force. It will have a commitment fee of 0.4 percent and a management fee of 0.6 percent.

HNB will loan 1,343.347 Euros at a premium of