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Chinese-backed Development Bank in talks with Sri Lanka for a loan of a billion US dollars

Sri Lanka Finance Minister, Mangala Samaraweera, has stated that he is currently in discussion with a Chinese-backed Asian Infrastructure Development Bank for a loan of up to a billion US dollars.

In parliament, Samaraweera said he was "in talks with AIIB for close to a billion US dollars in funds for the power sector and highways development,"

The Chinese-backed bank has already confirmed it will provide 280 million US dollars for Colombo Urban Development and a project for landslide protection.

There had been discussions last year of an offer of  300 million US dollars from Bank of China, but officials said talks had been since dropped.

Samaraweera has said that confidence in Sri Lanka’s economy is rising since the attempted coup in October and was now getting back on track. The economy took a further hit in terms of tourism following the devastating Easter bombings. 

Read more here: Sri Lanka’s tourism continues to tumble in the wake of Easter Sunday attacks

In May the International Monetary Fund (IMF) approved a loan of 164 million US dollars and the  US Millennium Challenge Corporation had approved 480 million US dollars. The Asian Development Bank approved 50 million US dollars for micro-loans last week. 

Whilst the IMF has granted this loan they have also urged Sri Lanka not to impose import controls for 'balance of payments' purposes.

Sri Lanka’s economic growth is estimated to be around 3.5 per cent in the first quarter of 2019, up from 1.8 per cent in the last quarter of 2018. 

Read more here.