German DFI DEG provides US$ 30 m loan to DFCC Bank

The German development finance institution DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH, member of KfW Bankengruppehas provided a loan of US$ 30 million repayable over eight years to DFCC Bank, Sri Lanka’s pioneer development bank to be utilized for granting sub loans targeted at the SME sector across a wide range of businesses including the renewable energy sector. The related loan agreements were signed in Colombo on October 6 by DFCC Bank CEO Nihal Fonseka and DEG Senior Vice President, Bernd Tuemmers.

At the signing Fonseka said “This new loan granted by DEG to DFCC reinforces the longstanding relationship of our two institutions going back several decades. It is also a recognition of Sri Lanka’s much improved macroeconomic fundamentals, DFCC’s financial strength as well as the role that is being played by DFCC in the post conflict growth phase of Sri Lanka where we have now extended our footprint to all parts of the country and are actively engaged in financing new SME projects in diverse sectors.

This credit line will supplement and diversify DFCC’s long-term funds pool and support our lending activities to green field projects”.

In response Tuemmers said “DEG has had a very cordial and longstanding relationship with DFCC and as part of our international cooperation initiatives, we are very happy to be a partner in the development of Sri Lanka during this crucial post conflict phase of the country’s forward march even in the midst of many adverse global economic conditions. Of particular relevance to the granting of this credit line is DFCC’s continuing commitment to supporting entrepreneurs in the SME sector including in the North and the East of the country”.

DEG, member of Germany’s KfW Bankengruppe, is one of the largest European development finance institutions for long-term project and company financing. For almost 50 years, DEG has been financing and structuring the investments of private companies in developing and transition countries. DEG invests in profitable projects that contribute to sustainable development in all sectors of the economy, from agriculture to infrastructure and manufacturing to services.

It also focuses on investments in the financial sector in order to facilitate reliable access to capital locally. To date, DEG has worked together with more than 1,600 companies and its financing commitments of more than 11 billion euros have contributed to providing an investment volume of 70 billion euros.

DEG’s aim is to establish and expand private enterprise structures in developing and transition countries, and thus create the basis for sustainable growth and a lasting improvement in the living conditions of the local population.