The World Bank has decided to extend a soft loan of US$ 1340 million to Sri Lanka at a low interest rate, Finance Minister Ravi Karunanayake said today.
He said that the World Bank had informed the Sri Lankan government this morning that an International Bank of Reconstruction and Development (IBRD) loan of US$ 900 million and another US$ 440 million under International Development Assistance (IDA) will be granted to Sri Lanka for 3 years.
The loans would be at concessionary rates and repayments spread out over 15 years, the ministry said in a statement.
“This is a great victory for us and it will help us in the fiscal consolidation programme that the new government has started,” Karunanayake said.
The new government, which came to power in January last year, also secured a $1.5 billion bailout from the International Monetary Fund in June after facing a balance of payments crisis.
The IMF last month described Sri Lanka’s performance since the rescue as “broadly satisfactory”, but said it needed to build its dwindling foreign reserves.
