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$1.7 billion loan to Sri Lanka on hold as crisis continues

An estimated $1.7 billion loan from Japan to Sri Lanka has been put on hold as political turmoil on the island continues, claimed the leader of the Sinhala extremist Jathika Hela Urumaya party.

Champika Ranawaka, who was the Cabinet Minister of Megapolis and Western Development until Sri Lanka was plunged into crisis in October, was quoted by Economy Next as saying the loan has now been “derailed”. The payment was reported to have funded the construction of a light rail transit system in Colombo.

"The loan was to have been signed in November 22," he told parliament, stating that other loans to Colombo  have also been put on hold.

Ranawaka’s claim comes after a senior US official confirmed that Sri Lanka’s participation in the Millennium Challenge Corporation (MCC), which is worth several million dollars in funding, has been “put on hold”.