Govt invites proposals for US$ 300m Syndicated Loan
COLOMBO: According to the Government funding programme of 2008, as
approved by Parliament in the Appropriation Act in December 2008, the
Government is empowered to borrow Rs. 708 billion to finance the Budget
2008. Of such amount, Rs. 460 billion (Rs. 323 billion from domestic
sources and Rs. 80 billion from foreign sources) amounting to
approximately 65 per cent has been raised by the Government so far.
At the same time, a few other loans amounting to approximately Rs. 16
billion are presently being negotiated.
Accordingly, a further amount of Rs. 232 billion is available to be
borrowed within the approved limits, states a Central Bank press
release. The Government now plans to raise Rs. 32 billion (US$ 300
million) by way of a syndicated loan in US$ or any major reserve
currency from international markets. As envisaged in the Budget and
approved by Parliament, the funds would be used for financing of the
ongoing infrastructure projects.
With this additional borrowing, the Government is of the view that
there will not be any further need for foreign currency borrowing this
After taking the above foreign currency borrowing, as well as the
other expected borrowings during the rest of the year, into
consideration, the Debt/GDP ratio is estimated to be the level of 78.5
per cent at the end of the year 2008, as against the ratio of 85.8 per
cent at the end of the year 2007.
The Central Bank of Sri Lanka (CBSL), as the Agent of the Government
has yesterday invited proposals from selected banks/investment banks to
offer their services to function as the Lead Manager for raising the
The proposed syndicated loan US$ 300 million is expected to have a
maturity period of two years or more with a floating or fixed rate of