Cabinet nod to sign Rs.14 b Japanese loan with Govt.

Thursday, 1 September 2016 00:03 - - {{hitsCtrl.values.hits}}

By Chamodi Gunawardana

Cabinet approval has been given for the Government to enter into a Rs. 14.5 billion loan agreement with Japan that will focus on governance improvement and fiscal consolidation, the Cabinet Spokesman said yesterday.

The loan, which will also improve capacity within the private sector, was approved on a Cabinet paper submitted by Prime Minister Ranil Wickremesinghe. The Government now expects to sign exchange notes with the Japanese Government to obtain the development policy loan of Rs. 14,453.

Cabinet Co-Spokesman Minister Gayantha Karunathilake said accordingly the Government will enter into a loan agreement with the Japan International Cooperation Agency (JICA), which is the development arm of the Japanese Government.

He added that Cabinet has approved the proposal made by the Prime Minister Ranil Wickremesinghe in his capacity as the Minister of National Policies and Economic Affairs to obtain the loan for development.

Karunathilake further said JICA had already agreed to provide funds for development of Sri Lanka.

The funds have been earmarked to be used to improve Government activities, stability of the private sector and progress of fiscal consolidation.

Meanwhile, during Wickremesinghe’s official visit to Japan last year, the Government and the Japanese Government had agreed to cooperate on many areas including advanced agriculture, science and technology, infrastructure and regional development, education and human resources development, civil security and safety.

Accordingly, a second proposal by Wickremesinghe, to establish the Japan-Sri Lanka Joint Comprehensive Partnership Secretariat in Colombo and Tokyo for facilitating the above purposes, was also approved by the Cabinet of Ministers on Tuesday.

Relations between Sri Lanka and Japan have strengthened since the Government came into power last year with several fresh projects inked with JICA and Asian Development Bank (ADB) which is strongly backed by Japan. The ADB has pledged to increase its funds to $1.2 billion by 2018 along with a variety of new projects including assistance to develop local capital markets.

Last month Japan also agreed to fund a light rail system for Sri Lanka’s ambitious Megapolis project which is estimated to cost $3.2 billion.