China Eximbank provides RMB 193.2 million government concessional loan for the Rural Electrification VII Project

Project narrative

On November 28, 2003, China Eximbank and the Government of Sri Lanka signed an RMB 193,200,883 government concessional loan (GCL) agreement for the Rural Electrification VII Project. The GCL carried the following borrowing terms: a 20 year maturity, a 5 year grace period, and a 2% interest rate. As of 2008, it had disbursed RMB 158,379,512.04 (Rs. 2,469,390,000). The borrower made repayments worth RMB 14,663,889 in 2018, RMB 14,663,890 in 2019, RMB 14,663,889 in 2020 and RMB 14,663,889 in 2021. The loan's amount outstanding was RMB 87,983,336 as of December 31, 2017, RMB 73,319,447 as of December 31, 2018, RMB 58,655,557 as of December 31, 2019, RMB 43,991,668 as of December 31, 2020, RMB 29,327,779 as of December 31, 2021, and RMB 21,995,834 as of June 30, 2022. The Rural Electrification VII Project involved rural electrification schemes located in Central, North, Western, Southern and Sabaragamuwa provinces. It sought to provide service connection to 65,000 consumers. It was initiated in March 2004 and completed in December 2006. However, the 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.