Loan from Bank of China to Sri Lanka faces delays

Colombo (News 1st):  Reuters reported today (Feb 7) that a $300 million loan offered by Bank of China to Sri Lanka is facing delays. Quoting government officials, Reuters reported that Sri Lanka was due to receive the loan before the end of January, but it is now unlikely to be finalized until later this month. R.H.S. Samaratunga, secretary to the finance ministry and treasury, said Colombo expected a response from the bank by February 20th, meaning the loan may not be finalized for several more weeks. The country is due to repay a record US $ 5.9 billion this year, including the US $ 2.6 billion in the first three months. Meanwhile, international media have reported that Kenya could lose the port of Mombasa to the Chinese government if the national Railway Corporation defaults in the payment of an estimated 1.9 billion euros owed to Exim Bank of China. The revelations are contained in the front page article of today’s Daily Nation newspaper which claims it has managed to secure a leaked copy of the contract. China is Kenya’s largest lender, accounting for 72% of all its foreign debts set to surpass the 5 trillion Shilling mark (42.8 billion euros). That accounts for more than 60% of the country’s Gross Domestic Product. According to sources, Sri Lanka's debt is 77% of its GDP. This is higher than the debt-to-GDP ratio of India, Pakistan, Malaysia and Thailand. Last year $1.1 billion in debt was written off by China in exchange for a long-term lease on the deep-water port of Hambantota.