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Sri Lanka has prolonged a credit score line with India by $200 million with the intention to procure emergency gas shares, the nation’s energy and power minister mentioned on Monday, as China mentioned it supported efforts for the island nation to restructure its debt.
Colombo was additionally in talks with New Delhi over extending the credit score line by an extra $500 million, minister Kanchana Wijesekera informed a information convention, with 4 gas shipments resulting from arrive in Might.
Hit exhausting by the pandemic and wanting income after Gotabaya Rajapaksa’s authorities imposed steep tax cuts, the island nation is now additionally critically wanting overseas change and has approached the Worldwide Financial Fund (IMF) for an emergency bailout.
Rampant inflation and shortages of imported meals, gas and medicines has led to weeks of sporadically violent protests.
Sri Lanka has used $400 million, on a number of shipments in April, of the $500 million credit score line prolonged by India earlier this yr, Wijesekera mentioned. Two gas shipments can be paid for from the remaining funds in Might.
“The Indian credit score line was prolonged by $200 million just lately and this can be utilised for 4 shipments in Might. Talks are persevering with for an additional $500 million with India so in complete the credit score line can be $1.2 billion,” Wijesekera mentioned.
Nevertheless, Sri Lanka continues to be dealing with cost challenges for gas imports with the state-run Ceylon Petroleum Company (CPC) owing $235 million for shipments already acquired, whereas about $500 million extra can be wanted to pay for letters of credit score maturing over the subsequent six weeks, he added.
Sri Lanka may also want {dollars} to pay for crude oil shipments to complement imports from India.
“We’ve got made procurement plans until June however we nonetheless must resolve how one can discover enough quantities of overseas change to make funds,” Wijesekera mentioned.
Beijing’s ambassador Qi Zhenhong informed Sri Lankan Finance Minister Ali Sabry at a gathering on Monday that China – one of many island’s largest bilateral lenders having prolonged about $6.5 billion in loans – helps its determination to work with the IMF to restructure its debt.
“Ambassador Zhenhong additionally assured Minister Ali Sabry that as a significant shareholder of the IMF, China is keen to play an lively function in encouraging the IMF to positively contemplate Sri Lanka’s place and to achieve an settlement as quickly as attainable,” Sri Lanka’s finance ministry mentioned in a press release.
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Might 03, 2022
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