Cabinet approves seeking $ 565 m in ADB loans

• $ 165 m for COVID-19 hit SME assistance
• $ 400 m for secondary education enhancement project 
• $ 1.65 m grant from Japan to minimise poverty  

Cabinet has approved a proposal to enter into several agreements with the Asian Development Bank (ADB) seeking nearly $ 565 million in loans. 

The proposal submitted by Prime Minister Mahinda Rajapaksa as the Finance Minister was approved by the Cabinet and comes in the wake of Sri Lanka struggling to find low-cost funding to boost growth and continue investment projects, while managing its debt to GDP ratio. 

The decision was announced at the Cabinet Press briefing held yesterday, where it was stated that the ADB has given its consent to extend $ 165 million under a scheme to provide assistance for Small and Medium Sized Enterprises (SMEs). 

The amount included $ 100 million for emergency response for the precautions to be taken for addressing the unfavourable impact of COVID-19 on SMEs and entrepreneurs. 

The Government is also seeking a concessionary loan of $ 400 million for the Secondary Education Sector Enhancement Project under the result-based loan grant financial methodology of the ADB. 

A further $ 1.65 million grant has been sought under a Japanese program to minimise poverty. Last month the Sri Lankan Government decided to cancel a $ 2 billion Light Railway Transit (LRT) Project, which was to be funded by Japan.