April 30, 2009 (LBO) – Sri Lanka is close to finalizing a 500 million US dollar long-term loan from Libya, Central Bank governor Nivard Cabraal who is visiting the country for discussions on the government-to-government credit, said. In a telephone interview from Rome Thursday, Cabraal said Sri Lanka was negotiating a 15-year year loan with a bullet repayment and he was flying to Tripoli the next day to finalize the loan.
He was expecting the loan to be wrapped at a “maximum within 10 days”.
The loan was first announced following a state visit of President Mahinda Rajapaksa to Libya earlier in April.
However past experience with Iran as well as in negotiating swap arrangements with other central banks has shown Sri Lanka that various conditions and delays can be expected when dealing with foreign governments.
Sri Lanka is also expecting a 1.9 billion US dollar bailout from the International Monetary Fund by mid May amid reports that the United States was delaying approval of the loan over Sri Lanka’s treatment of civilians in an internal conflict.
A mission from the IMF is in Sri Lanka to conduct a ‘safeguard assessment’ to make sure that the central bank’s has sufficient controls to make sure that Fund res