CDB provides $500 million loan in 2021 to help Government of Sri Lanka meet its outstanding debt obligations and shore up foreign exchange reserves (Linked to Project ID#71123, ID#89482, ID#89484)

On April 12, 2021, China Development Bank and the Government of Sri Lanka signed a $500 million loan agreement (foreign currency term financing facility agreement or FCTFF). The loan (ID #4510202001100001788) carried the following borrowing terms: an 10-year maturity, a 3 year grace period, an interest rate of 2.722% (6-month LIBOR plus a 2.51% margin), and an upfront (management) fee of 1.25%. The proceeds of the loan were to be used by the borrower (the Government of Sri Lanka) to shore up official foreign reserves and meet outstanding debt obligations (i.e. repay other loans). The FCTFF agreement was signed by Dr. Palitha T.B. Kohona, Ambassador of Sri Lanka to the People's Republic of China on behalf of the Government of Sri Lanka and Mr. Wang Wei, Deputy Director General, China Development Bank on behalf of the China Development Bank. The loan fully disbursed on April 14, 2021. The loan’s outstanding amount was $500,000,000 as of June 30, 2022.

Additional details

1. AidData has estimated the all-in interest rate (2.722%) by taking the average 6-month LIBOR rate during the month and year (April 2021) when the loan agreement was finalized (0.212%) and adding a 2.51% margin. 2. The borrower signed a $1 billion FCTFF with CDB on October 12, 2018 (captured via Project ID#71123), a $500 million FCTFF with CDB on March 18, 2020 (captured via ID#89482), and an RMB 2 billion term facility agreement with CDB on August 17, 2021 (captured via ID#89484). Sri Lanka’s Ministry of Finance, Economy and Policy Development identifies the 2020 FTFF as an ‘upsizing’ of the 2018 FTFF 2018. Therefore, AidData assumes that the purposes of the 2021 FTFF, 2020 FTFF, and 2018 FTFF are identical. 3. The Government of Sri Lanka loan key number is 2021002.

Number of official sources

24

Number of total sources

26