China Eximbank provides RMB 260.5 million government concessional loan for Supply of 15 Diesel Multiple Units (DMUs) Project

On May 15, 2007, China Eximbank and the Government of Sri Lanka signed an RMB 260,528,797 ($38,683,633) government concessional loan (GCL) agreement for the Supply of 15 Diesel Multiple Units (DMUs) Project. The GCL carried the following borrowing terms: a 2% interest rate and a 12-year repayment period. As of 2008, it had disbursed approximately RMB 152,988,788.83 (Rs. 2,385,340,000). The borrower made repayments worth RMB 20,842,304 in 2018, RMB 20,842,304 in 2019, RMB 20,842,304 in 2020 and RMB 20,842,304 in 2021. The loan's amount outstanding was RMB 104,211,519 as of December 31, 2017, RMB 83,369,215 as of December 31, 2018, RMB 62,526,911 as of December 31, 2019, RMB 41,684,607 as of December 31, 2020, and RMB 20,842,303 as of December 31, 2021, and RMB 10,421,152 as of June 30, 2022. The purpose of the project was to facilitate the acquisition of 15 diesel multiple units (power train sets) to Sri Lanka Railways. China National Machinery Import and Export Corporation (CMC) was responsible for supplying the power train sets to Sri Lanka Railways. The supplier of the power train sets was Hubei Machinery and Equipment Import-Export Company. This project was part of a broader effort to modernize the Sri Lankan Railway system and reduce inconvenience caused to commuters traveling from Colombo to the suburban areas and on the Kelani Valley route. The first 3 power train sets were scheduled to reach Colombo by August 2008, and the other twelve power train sets were to be delivered in two batches of six in September 2008 and December 2008. This project was successfully completed in 2009. However, this project has encountered debt repayment problems. On April 12, 2022, the Government of Sri Lanka announced a ‘pre-emptive’ sovereign debt default, noting that it would suspend debt repayments to all external creditors other than multilateral institutions. Its decision to suspend external debt service reportedly affected all China Eximbank loans with amounts outstanding at the time of the announcement.

Additional details

1. In 2007, the Chinese Government also issued a loan for the provision of 100 carriages to the Government of Sri Lanka (see Project ID#33275), and it committed another loan in 2010 for the provision of an additional 13 diesel multiple units (see Project ID#49343). 2. The Government of Sri Lanka loan key number is 2007015.

Number of official sources

26

Number of total sources

32