Colombo:
Sri Lanka on Tuesday signed a loan agreement with China worth 2 billion Renminbi (USD 308 million) to help its COVID-19 response, financial revival and economic stability, the Chinese embassy stated.
“China Development Bank and Sri Lankan Government have entered into an agreement of RMB 2 Billion (approx Rs 61.5 Billion) Term Facility today (Aug 17), upon a request from Sri Lanka side to support its #COVID19 response, economic revival, financial stability and livelihood betterment,” the embassy tweeted.
The newest loan is aspect of a USD 1.2 billion price range help in credit agreed earlier. Sri Lanka has received USD 1 billion in credit help in two tranches of USD 500 million every in April 2021 and March 2020 respectively.
The coronavirus pandemic has severely jolted the Sri Lankan economy which is dependent on its tourism sector.
Earlier in February, Sri Lanka settled a USD 400 million currency swap facility with India, to tide more than economic strains.
Speculation that Beijing is attempting to lure Sri Lanka into a debt trap has been outright rejected by the President Gotabaya Rajapaksa-led government.
Struggling to spend back more than USD 8 billion-dollar Chinese loans and investments, the earlier Sri Lankan government had handed more than the majority share of the Chinese-constructed strategic southern port of Hambantota to a Chinese state-owned enterprise on a 99-year lease in 2017.