India’s US$350Mn loan package will be disbursed as Indian rupee-dominated loans

 

The US$350 million loan package announced by India for post-Ditwah reconstruction works will be disbursed as Indian- rupee dominated loans (INR loans) at concessionary rates, Daily Mirror learns.

During the visit of Indian External Affairs Minister Dr.S. Jaishankar, US $ 450 million financial package was announced. Of it, US$100 million will be given as a grant. The grant, like in any other project, will be made available in Sri Lankan rupees.

In the aftermath of the 2022 economic crisis, India decided to prioritise grant projects in Sri Lanka instead of loan projects. However, after cyclone Ditwah hit the country, the Reserve Bank of India has worked out the new loan package on the basis that grant projects alone will not suffice in rebuilding efforts, given the magnitude of the damage unleashed.

The authorities of India and Sri Lanka are currently working on modalities for the identification of projects for the disbursement of loans. Indian contractors are likely to be involved in the execution of these projects in partnership with local agents.

Indian assistance will cover sectors worst affected by the cyclone, including rehabilitation and restoration of road, railway and bridge connectivity, support for construction of houses fully destroyed and partially damaged, support for health and education systems, agriculture, including addressing possible shortages in the short and medium term and working towards better disaster response and preparedness.

In the aftermath of the disaster, India, under Operation Sagar Bandhu, delivered over 1,100 tons of relief material, including dry rations, tents, tarpaulins, hygiene kits, essential clothing and water purification kits. About 14.5 tons of medicines and medical equipment were also provided. Yet another 60 tons of equipment was brought to Sri Lanka to assist the relief operations.