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Overview

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 Record ID#71123, ID#89482, ID#89484)

Commitments (Constant USD, 2023)$461,070,819
Commitment Year•2021Country of Activity•Sri LankaDirect Recipient Country of Incorporation•Sri LankaSector•General Budget SupportFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Apr 12, 2021
Start (actual)
Apr 14, 2021
First repayment (originally scheduled)
Apr 11, 2024
Last repayment (originally scheduled)
Apr 10, 2031

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Government Agencies

  • Government of Sri Lanka

Implementing agencies

Government Agencies

  • Government of Sri Lanka

Loan desecription

CDB provides $500 million loan in 2021 to help Government of Sri Lanka meet its outstanding debt obligations and shore up foreign exchange reserves

Grace period•3 yearsGrant element•32.4627%Interest rate (t₀)•2.72463%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•10 years

Narrative

Full Description

Project narrative

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.

Staff comments

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 Record 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.