China Eximbank provides $24.9 million buyer’s credit loan for Lighting Sri Lanka Uva Province Project (Uva Udanaya)

Project narrative

On July 19, 2011, China Eximbank and the Government of Sri Lanka signed a $24,928,046.88 buyer’s credit loan (BCL) agreement [BLA201113] for the Lighting Sri Lanka Uva Province Project (Uva Udanaya). The BCL carried the following borrowing terms: an interest rate of 6-month LIBOR plus a 2.8% margin, a 12 year maturity, and a 3 year grace period, a 0.5% commitment fee, a 0.3% management fee, and a 6% Sinosure insurance premium (exposure fee). China Eximbank disbursed an unknown amount in 2010, and unknown amount in 2011, $6,190,082.64 in 2012, $8,750,000 in 2013, $27,904.18 in 2014. The borrower made repayments worth $2,219,976 in 2018, $2,219,976 in 2019, $2,219,976 in 2020, and $2,219,976 in 2021. The loan's amount outstanding was $14,429,846 as of December 31, 2017, $12,209,870 as of December 31, 2018, $9,989,894 as of December 31, 2019, $7,769,917 as of December 31, 2020, $5,549,941 as of December 31, 2021, and $4,439,952 as of June 30, 2022. The purpose of this project was to procure materials required for the construction of 250 new substations, 625 km of new MV lines & 2250km new low voltage lines in Moneragala and Badulla districts within Uva Province. China National Complete Plant Import & Export Corporation (COMPLANT) was the contractor responsible for project implementation. According to the Government of Sri Lanka’s External Resources Department (ERD), the project was completed on July 19, 2013. However, it 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.