The Sri Lankan government will approach global lenders including the World Hank and the International Monetary Fund (IMF) to borrow from them to the tune of US $ five billion to restructure expensive loans, obtained from China, by the previous regime for infrastructure development projects in the country.
According to Reuters, the Central Bank Governor has said that the country had borrowed more than US $ 6 billion, mainly from China, for a massive infrastructure drive under the Rajapaksa government at the end of a 26-year civil war which ended in May 2009. The new government, under the leadership of Maithripala Sirisena has already ordered a review on all projects initiated by the previous government.
The new government claims that the Rajapaksa administration had to borrow money, on unfavourable terms and the Rajapaksa government agreed in respect of some public projects without following the proper tender procedures.
“We have to look at what options are available in the agreements and we should try and reduce the high borrowing cost, obviously with longer-term low cost borrowing,” Reuters had reported quoting Deputy Minister for Policy Planning and Economic Affairs Marsha de Silva.