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More than USD$1 billion of US, Japanese aid to Sri Lanka frozen claims Ranil

Over USD$1 billion of development aid destined for Sri Lanka from the United States and Japan has been frozen due to the political turmoil on the island, claimed Ranil Wickremesinghe this week.

"Countries are sensitive, they have concerns (about a government led by Rajapaksa) democratic countries have concerns," claimed Wickremesinghe, who is tussling with Mahinda Rajapaksa for the position of Sri Lankan prime minister.

He told Reuters in an interview that a nearly USD$500 million aid programme for building of highways and improving land administration by the United States Millennium Challenge Corporation (MCC) had been frozen following the turmoil.

Japan has also frozen a a soft loan of USD$1.4 billion for a light railway project,

"A lot of projects are held up, the Millennium Challenge, the Japanese loan," said WIckremesinghe.

The hold on the two projects was confirmed to Reuters by separate Sri Lankan government officials.

The announcement comes after Samantha Power, a senior US policy figure and former ambassador to the UN, urged the US to consider suspending aid and imposing targeted sanctions on Sri Lanka, in response to the island’s ongoing political crisis.