China & Capital Markets are Sri Lanka's Top Lenders in 2010

24th November 2010, www.lankabusinessonline.com

China has become Sri Lanka's top bilateral lender up to September 2010, displacing Japan both in commitments and disbursements, with international capital markets dwarfing traditional lenders with a billion dollar bond a month later.

Sri Lanka has racked up 2,481 million US dollars in bi-lateral and multi-lateral financing up to September 2010, the highest ever volume of foreign financing commitments, with China leading the way with 668 million US dollars of export credits.

This year China had displaced Japan, the traditional top lender in both commitments and disbursements, up to September 2010, according to finance ministry data.

Dwarfed

But China's credits were dwarfed by international capital markets this year, with the government raising one billion dollars through a 10-year bond, largely for debt repayment in October.

Japan came in second with a commitment of 424.3 million US dollars including 27.7 million US dollars of grants, the Asian Development Bank came third with 369.7 million US dollars and Russia came in fourth place with a 300 million US dollar credit line.

World Bank had committed 217.8 million US dollars. Iran had committed 111.2 million US dollars in export credits and Australia 105.2 million US dollars.

The finance ministry said this year's financing commitment volume topped the previous high of 2,221.7 million US dollars reported in 2009.

The government was now sitting on an aid pipeline of 6,968 million US dollars which included 1,156.6 million dollars for power and energy and 1,701 million US dollars for roads and transport, 887.3 million US dollars for water supply and sanitation.

Disbursements

Up to end-September a total of 1,460.3 million US dollars of commitments were disbursed.

In actual disbursements also China led the tables with 643.7 million US dollars of which 545 million US dollars were export credits, according to finance ministry data.

The disbursements were swelled with a 445.5 million US dollar trance given to state-run Ceylon Electricity Board to build a second stage of a 900 Megawatt coal power complex. The power plant is a high return, long overdue project.

Japan disbursed 237.1 million US dollars.

The Asian Development Bank had disbursed 187.1 million US dollars including 17.2 million US dollars and the World Bank 120.5 million US Dollars.