Iran extends interest
free credit facility:
Cheaper oil for one more year
The Iranian Government has extended by another year the four month
interest free credit facility to Sri Lanka originally granted following
President Mahinda Rajapaksa’s visit to Iran in November 2007.
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Ahmadinejad |
Consequent to talks with Iranian President Dr. Mahmoud Ahmadinejad,
the Iranian Government granted the facility beginning January 2008 and
ending on August 31, 2009.
In 2008 alone, Sri Lanka imported crude oil under this facility to
the tune of US$ 1.05 billion (Rs.110,550 million) nearly all of its
requirements, helping release the pressure on the island’s foreign
exchange requirements in a year of significance for the Government’s war
with the LTTE. Treasury circles have acknowledged this as a substantial
rolling facility that helped ward off any financial crisis, last year.
An additional three month credit package at a concessionary rate of
interest was also accommodated in Sri Lanka’s favour if the country
needed further time. Further to the discussions, Sri Lanka’s Ambassador
to Iran M.M. Zuhair had with the Iranian authorities on the instructions
of President Rajapaksa, the National Iranian Oil Co. under the oil
Ministry of the Islamic Republic of Iran has extended by another year
the special facility on the same terms as earlier.
Finance Ministry Secretary Sumith Abeysinghe, and Ceylon Petroleum
Corporation Chairman Major General A.B. Thoradeniya coordinated with Sri
Lanka’s Ambassador in Tehran. Meanwhile, former Iranian Commerce
Minister Mir Kazemi, has been appointed as the new Petroleum Minister.
Mir Kazemi was the Minister in attendance when President Rajapaksa
visited Iran.
He also accompanied President Ahmadinejad, when the latter visited
Sri Lanka in May 2008 on the invitation of President Rajapaksa and
inaugurated the Uma Oya Hydro Power and Irrigation Project - the US$ 450
Million project, 85 percent of which is funded by Iran.
During that visit, President Ahmadinejad formally inaugurated the
US$1.47 billion Sapugaskanda Refinery Expansion and modernization
Project, 70 percent of which has been committed to be financed by Iran. |
