CDB provides RMB 2 billion 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#89483)

On August 17, 2021, China Development Bank and the Government of Sri Lanka signed an RMB 2 billion (approximately LKR 61.5 billion) term loan agreement (ID# 4510202001100001746). The loan carried the following borrowing terms: an 10-year maturity, a 3 year grace period, an interest rate of 4.85% (LPR 5Y plus a 0.2% 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 loan fully disbursed on August 31, 2021. The loan’s outstanding amount was RMB 2 billion as of June 30, 2022.

Additional details

1. AidData calculated the all-in interest rate (4.85%) by taking the LPR 5Y (5-year China Loan Prime Rate) rate during the month and year (August 2021) when the loan agreement was finalized (4.65%) and adding a 0.2% margin. 2. In order to meet its outstanding debt obligations and shore up foreign exchange reserves, the Government of Sri Lanka signed a $1 billion foreign currency term financing facility agreement (FTFF) 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 a $500 million FCTFF with CDB on April 12, 2021 (captured via ID#89483). AidData assumes that the purposes of the RMB 2 billion CDB loan and the 2018, 2020, and 2021 foreign currency term financing facility agreements (FTFFs) are identical. 3. The Government of Sri Lanka loan key number is 2021026.

Number of official sources

20

Number of total sources

27