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ADB-funded Capital Market Development Program stalled


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  • Only one out of 17 conditions completed by Govt.
  • $ 125 m second tranche stuck till more conditions met
  • SL has till August 2019 to complete program  

 

The $ 250 million Capital Market Development Program funded by the Asian Development Bank (ADB) has stalled with the ADB refusing to release the second tranche until Government agencies fulfil a majority of the conditions set out by the donor agency, a top official confirmed yesterday.  

“The Capital Market Development Program is progressing slowly as the Government agencies have only fulfilled one condition out of 17 conditions that were set out before releasing the second tranche of $ 125 million for the program,” ADB Country Director Sri Widowati said. 

The Government entered into a loan agreement with the ADB in 2016 to obtain a loan of $ 250 million from the Ordinary Capital Resources Fund of ADB to implement the Capital Market Development Program (CMDP) in Sri Lanka. 

The proposed loan of $ 250 million will be disbursed in two tranches of approximately $ 125 million each based on the accomplishment of the policy actions relevant for each of the tranches.

According to her, Sri Lanka has to meet the second tranche conditions before 31 August next year to obtain the second tranche of the funding for the contention of the program.

The main objective of the CMDP is to ensure that the capital market in Sri Lanka is more effective in mobilising resources for the economy’s financing requirements to better promote growth and development.

The Finance Ministry will be the executing agency of the program, whereas the Central Bank, Securities and Exchange Commission (SEC), Insurance Board of Sri Lanka (IBSL), and Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) will be the implementing agencies.

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