Indian government agrees to lend US$ 1 billion for Sri Lanka's infrastructure projects

Sri Lanka's Treasury Secretary has said today that India has agreed to lend US$1 billion to fund Sri Lanka's infrastructure projects, mainly in former war zones in the north and east.


"India assured US$ 800 million for the reconstruction of railway and a further US$ 200 million for a power plant," Treasury Secretary Dr. P.B. Jayasundara has told Reuters in a mobile phone text message from India.

"It is a 20-year credit at an absolutely low interest rate. About US$ 250 million in a grant will also be available in support of housing development in the north and east," he added.

Indian Foreign Secretary Nirupama Rao said at a media briefing yesterday noted the extensive assistance being provided by India for Sri Lanka's resettlement of the displaced including Rs.500 crores as grant and about US$ 800 million as lines of credit for railway projects.

Ms. Rao also said that in order to assist setting up of the NTPC-CEB Joint Venture of 500 MW Thermal Power Plant at Trincomalee in Eastern Sri Lanka, India will be extending a line of credit of US$ 200 million.

The Sri Lankan delegation headed by President Mahinda Rajapaksa is visiting India on a four-day official visit.