Convention signed between Lanka Orix and PROPARCO

PROPARCO, the private sector arm of the AFD Group (French Development Agency), signed a 10 million Euro loan on July 6 with LOLC (Lanka ORIX Leasing Company PLC) to support the development of their operations in the North and East of the country.

The signatories were Kapila Jayawardena, Group Managing Director/ CEO-LOLC Group, Ishara Nanayakara, Deputy Chairman – LOLC Group and Jean-Pierre Barral, Regional representative for PROPARCO South Asia.

PROPARCO is a Financial Institution partly held by AFD and private shareholders from European and emerging countries, which is providing long-term resources to the private sector in emerging countries. Both AFD and PROPARCO have started working in Sri Lanka in the aftermath of the tsunami.

The birth of LOLC is the result of the introduction by IFC of the Orient Leasing Company (OLC) - presently ORIX Corporation of Japan, the world´s largest independent leasing company. LOLC has benefited from the support of various international financial 

institutions for the development of its activities, and PROPARCO has already extended a 5 million dollars financing to Lanka Orix in 2005 in the framework of the post-tsunami reconstruction program.

PROPARCO’s financing will enable LOLC to accelerate its roll-out in the North and the East. Leasing and asset-finance is well suited for the financing of commercial and agricultural vehicles for Small and Medium Entreprises (SME) that have a limited access to credit. 

By providing support to Lanka Orix, this financing will thus contribute to the development of the North and the East Provinces by facilitating access to finance for SME.

The main focus of PROPARCO in Sri Lanka is clean energy, agro-industries and micro finance. This is the first financing in Sri Lanka for PROPARCO under this new strategy.

About PROPARCO: PROPARCO’s mission is to be a catalyst for private investment in emerging and developing countries for sustainable growth and achieving the Millenium Development Goals. PROPARCO has a wide range of financial instruments to meet the specific needs of private investors (loans, equity, guarantees and financial engineering). PROPARCO has a team of 150 people, ten regional offices and is supported by 50 AFD Group offices worldwide. In 2009 PROPARCO signed 1 billion $ for over fifty projects in more than thirty countries.

About Lanka Orix Leasing Company PLC: LOLC (Lanka ORIX Leasing Company), a public quoted financial services giant, pioneered leasing and factoring in Sri Lanka thereby adding a new dimension to the financial services sector of the country. Today, it offers a wide range of financial solutions and non-financial solutions across all regions of the country through its strategically placed branch network. LOLC makes a vital contribution towards the regional economies by making financial services available to rural entrepreneurs. 

About AFD: AFD is the central agency for implementing French Overseas Development Assistance: it is a specialized financial institution subject to French and international regulations. AFD combines the functions of a development bank and an agency to implement France’s development assistance policy. In Sri Lanka AFD started its operations in 2005 with a mandate for post tsunami reconstruction. It has financed infrastructure projects with soft loans in the East for a total of 89 million €. Other possibilities of interventions are presently being considered.