India to give an additional $1-billion emergency financial support to SL
By S Venkat Narayan
Sri Lanka’s Finance Minister Basil Rajapaksa met Indian Prime Minister Narendra Modi in New Delhi Wednesday morning to discuss bilateral matters and further Indian assistance to the island-nation, now in the grip of a major economic crisis.
Sri Lanka’s High Commissioner to India Milinda Moragoda was present at the meeting.
It is widely expected that India will clear a further $1-billion emergency financial support that New Delhi and Colombo have been negotiating since Rajapaksa’s last visit to New Delhi early in December.
At that time, he held talks with External Affairs Minister Dr Subrahmanyam Jaishankar and Finance Minister Nirmala Sitharaman. Both sides had agreed on a “four-pronged” approach to addressing Sri Lanka’s meltdown. It included Indian credit lines for import of essentials such as food, medicines and fuel; currency swap to help boost Sri lanka’s foreign exchange reserves, an “early” modernisation project of the Trincomalee oil tank farm, and Colombo’s commitment to facilitate Indian investments in Sri Lanka.
Since January last, India has extended $1.4-billion support, by way of a $400-million Reserve Bank of India (RBI) currency swap, a $500-million loan deferment, and a $500-million Line of Credit for fuel imports. The additional $1 billion, if cleared, will bring some relief to Sri Lanka, amid its current fuel and gas shortages, and soaring prices of food and other basic items.
Between Rajapaksa’s two New Delhi visits in a span of four months, India and Sri Lanka signed key agreements, both at governmental levels and involving private Indian investors. On January 6, Indian Oil Corporation (IOC) subsidiary Lanka IOC, Ceylon Petroleum Corporation (CPC) and the Government of Sri Lanka signed three agreements to jointly develop the Trincomalee oil tank farm in eastern Sri Lanka.
On March 11, the National Thermal Power Corporation (NTPC) signed an agreement with the Ceylon Electricity Board (CEB) to jointly set up a solar power plant at Sampur in Trincomalee. The same day, the Adani Group signed a deal for setting up two renewable energy projects in northern Sri Lanka, at an estimated cost of $500 million. This agreement was not publicised by either side.
Rajapaksa was scheduled to meet Jaishankar for a one-on-one interaction later on Wednesday, sources said.
