Sri Lanka looks to enter into US $ 200mn policy loan with ADB

Sri Lanka will enter into a loan agreement with the Asian Development Bank (ADB) for a policy loan amounting to US $ 200 million, to push the economic stabilisation and reformation programme.
The proposal, put forward by President Ranil Wickremesinghe, in his capacity as the Finance, Economic Stabilisation and National Policies Minister, received the Cabinet nod this week. 

The US $ 200 million loan, which is the first tranche of the US $ 400 million programme, will be subject to an annual interest rate of 2 percent, with a repaying period of 25 years. This includes a grace period of five years, in relation to the first sub-programme.  
Initial discussions with the ADB have been held by the government to obtain two loan facilities worth US $ 200 million each, based on the policies to implement two sub-programmes under the economic stabilisation and reformation programme.  

Under the first sub-programme, Sri Lanka plans to implement accelerated reformations to enhance the conflict management framework and stabilisation in the finance sector. Under the second sub-programme, it has been proposed to develop an all-inclusive resistant finance system. 
The ADB had previously approved a US $ 350 million special policy-based loan to provide budget support to Sri Lanka for economic stabilisation. The programme was part of a broader package of financial assistance anchored by the International Monetary Fund’s Extended Fund Facility for the country, which aims to stabilise the economy and lay the foundation for economic recovery and sustained growth.