India extends over $ 2.5 b credit for SL in Q1

• SL receives 40,000 tons of diesel under Indian assistance on Saturday 
• India provides nearly 200,000 tons of fuel to SL during 50 days, including 40,000 tons from IOC in Feb. outside the credit line 
• Indian High Commissioner Gopal Baglay characterises fuel deliveries as concrete manifestation of commitment to SL in current circumstances with its ‘Neighbourhood First Policy’

Indian has extended over $ 2.5 billion in facilities to help Sri Lanka to get over its serious economic crisis. 

“In response to a separate and urgent request from the Sri Lankan Government, extension of a credit facility of $ 1 billion for supply of essential items including food and medicines has been finalised and the first shipments of rice under this facility is expected to reach Sri Lanka soon.

“Earlier in January this year, India had provided financial assistance to Sri Lanka that included a credit swap of $ 400 million and deferment of an Asian Clearing Union payment of over $ 515 million. In cumulative terms, Indian support to the people of Sri Lanka in the first quarter of 2022 is in excess of $ 2.5 billion,” the Indian High Commission said in a statement.

Given the urgent nature of Sri Lanka’s requirement, India worked overtime to expeditiously finalise and start implementing both the lines of credit, within weeks, the statement said.

“The Government of India also continues to encourage efforts towards medium to long term capacity creation through enhanced Indian investment in Sri Lanka in key sectors that include ports, renewable energy, manufacturing, etc,” it said.

On 2 April, a consignment of 40,000 tons of diesel under Indian assistance through line of credit of $ 500 million was handed over by High Commissioner Gopal Baglay to the Energy Minister Gamini Lokuge in Colombo. 

This is the fourth consignment under the fuel line of credit, with previous deliveries on 16 March, 20 March and 23 March respectively. With Saturday’s consignment, the total fuel delivered to the people of Sri Lanka over the last 50 days amounts to nearly 200,000 tons including a consignment of 40,000 tons by Indian Oil Corporation outside the line of credit facility in February 2022.

Speaking on the occasion, High Commissioner Gopal Baglay characterised the fuel deliveries as a concrete manifestation of India’s commitment to the people of Sri Lanka in the current circumstances in line with the ‘Neighbourhood First Policy’. 

Energy Minister Gamini Lokuge thanked the Government of India for the fuel consignments. Earlier, on 23 March, Sri Lankan Prime Minister Mahinda Rajapaksa thanked Prime Minister Narendra Modi for the recent Indian economic development assistance and credit facilities to Sri Lanka and said he expected the Indian Government would pay special attention to Sri Lanka’s development in the future as well.

It may be recalled that the Export Import Bank of India and the Sri Lankan Government signed a $ 500 million Line of Credit Agreement for purchase of petroleum products on 2 February 2022. The Agreement was signed by Treasury Secretary S.R. Attygalle on behalf of the Sri Lankan Government and Indian EXIM Bank Chief General Manager Gaurav Bhandari from the Indian side.