India Provides US$ 12.5 Billion Loan to Sri Lanka

[Lankan Ranger]

India Provides US$ 12.5 Billion Loan to Sri Lanka

India will continue with infrastructure assistance for Jaffna and is confident that the region can recapture its glorious days as a major economic centre and bustling city, Indian High Commissioner Ashok Kantha said yesterday.

Kantha, who was the chief guest, also said India had already pumped in US$ 12.5 billion for northern reconstruction and will further its policy of connectivity, by assisting the development of northern infrastructure in the rail, sea and air sectors.

"In the next few years, we will work closely with the Sri Lankan government to re-stablish rail links from Medawachchiya to Paranthan and from Kankesanthurai to Palali. A US$ 450 million project, to be implemented by an Indian company, in partnership with Sri Lankan companies is in the pipeline."


Connectivity was also planned between the Kankesanthurai Harbour and the Palali Airport, Kantha said.

India, he said, would also assist in the renovation of the Kankesanthurai Cement Factory.

The Island-Business

 

[Lankan Ranger]

Sri Lankan’s Surprised

India had offered its largest loan to Sri Lanka.

US$ 12.5 Billion to Sri Lanka

Earlier Bangladesh got US$ 1 Billion from India.

Now Sri Lanka got US$ 12.5 Billion from India.

Looks like now New Delhi knows the importance of Colombo

 

[Dr.Evil]

R u sure about $12.5 Billion, Its kind of a huge amount to be given to Srilanka.

 

[jha]

India knows the importance of its neighborhood ...development cant be complete if neighbors are lagging behind...so the more development in india means more and more development for neighbors..

 

[Justin Joseph]

India cares for friends.

 

[mrwarrior006]

12.5 billion it kind off looks huge

infact very huge ar u sure the figure is right

 

[Storm Force]

$12.5 billion is massive nearly the size of most countires Forex reserves

 

[luffy]

May be everything including private investment etc.....even then it is too huge...........

 

[Justin Joseph]

$12.5 billion is massive nearly the size of most countires Forex reserves

don't be naughty

 

[Hyde]

12.5 billion dollars is a huge amount. I will be very surprised if this news is true

 

[nakodo]

12.5 B USD is tooooo far fetched

Global Times - China, India sign loan deals with Sri Lanka

China, India sign loan deals with Sri Lanka

By Yu Miao

Both China and India opened their checkbooks Wednesday to grant massive support to Sri Lanka.

In a deal signed in Beijing last week, China agreed to loan $290 million to the Sri Lankan government to build an airport and expand the island's railway network, the foreign ministry in Colombo said Wednesday.

Beijing will provide a $190 million loan through its funding arm, Export-Import Bank, to construct the island's second airport and $100 million to boost the capacity of the Sri Lankan railway, the ministry said in a statement.

Two countries also discussed more funding for highways in the island's war-ravaged Jaffna peninsula, the statement said.

"He (Sri Lankan President Mahinda Rajapaksa) appreciates China assisting Sri Lanka at a very crucial stage of her social-economic development, which shoulders a major portfolio of the financial requirements," the statement added.

China was the largest foreign funding source for Sri Lanka in 2009 with $1.2 billion, followed by the Asian Development Bank with $424 million.

Meanwhile, India and Sri Lanka on Wednesday signed a Line of Credit agreement for $67.4 million to fund the sec-ond phase of upgrades for the Southern Railway Line from Colombo to Matara, a city on the southern coast of Sri Lanka, according to The Hindu newspaper.

The Indian government, through the Export-Import Bank of India, had earlier provided a $100 million Line of Credit to Sri Lanka under an agreement signed in July 2008, the newspaper added.

Although both countries pledged support to the pearl of the Indian Ocean, the BBC quoted some Indian officials as saying that they "fear Beijing is trying to undermine New Delhi's influence in the region through its economic assistance," indicating a possible rivalry behind those supports.

Hu Shisheng, a researcher at the China Institutes of Contemporary International Relations, told the Global Times that such conspiracy theories are unnecessary.

"Sri Lanka's strategic importance in the Indian Ocean is indisputable. However, in terms of influence on Sri Lanka, China is incomparable to India, which sits right next to Colombo," Hu said. "China and India are growing powers in Asia, so an overlap of influence may happen occasionally. Both countries just need to adapt to new situation; suspicions won't bring any benefits."

Wang Dehua, director of the South Asia and Central Asia Department at the Shanghai Institutes for International Studies, pointed to China's long-term relations with Sri Lanka.

"The Sino-Sri Lankan relations can trace back 600 years to the famous Eunuch Sanbao to the Western Ocean in the Ming dynasty. As an old friend of Colombo, China will continue developing this sound relationship and bring harmony to the Indian Ocean."

Agencies contributed to this story

 

[Imperial]

I think $12.5 billion is way too much money to give without any thing in return.

It must be around 1.25 billion. I mean look at USA. They gave Pakistan $14 billion and they expect so much from them.

To be honest its not within Indian capacity atm to give a loan this big. If this would to happen political parties would have a field day at the parliament.

I agree we should help our neighbors but I think between countries it should be two way street. I mean Sri Lanka has so much to offer. Why not trade as equals and invest in their country rather than giving loan. This will help them as well as help us keep our fiscal deficit at a lower level.

 

[nakodo]

keep our fiscal deficit at a lower level.

How does loan to a another country raise fiscal deficit? I am curious. Wont it go down as an asset on your books rather than liability?

 

[Justin Joseph]

How does loan to a another country raise fiscal deficit? I am curious. Wont it go down as an asset on your books rather than liability?

Also, govt. is taking enough steps to cut the deficit and our economy is growing up at fast rate.

Also, the tax collections are at all time high.

By next year as the direct tax code and GST will be implemented govt will have more and more money as tax. Also, the comman people and businesses will benefit from lower and uniformed taxation. Its win win situation for all.

 

[Frankenstein]

12.5 bn is like hell