Sri Lanka gets budgetary support grant from Japan

March 13, 2007 (LBO) -- Sri Lanka has secured a 10.





2 million dollar grant from Japan to support the island's balance of payments, with the funds to be used to import goods and material, the Japanese Embassy said Tuesday.

Japan, Sri Lanka's biggest bi-lateral donor, had disbursed 198.8 million dollars from January to September 2006, according to finance ministry figures.







"This grant will be utilised for economic structure reforms, mitigation of balance of payment difficulties as well as for poverty reduction through rural development projects," the statement said.

The aid package, which was inked by treasury chief Punchi Banda Jayasundera and Japanese Ambassador Kiyoshi Araki last week, forms part of a bigger 13.78 million dollar grant facility.

However, the funds cannot be used to purchase goods for the military.

"In the previous two occasions we used the grant from Japan to buy fertiliser, jet oil and crude oil," explains Mapa Pathirana, the Japan Division Director attached to Sri Lanka's finance ministry.

"We may use the grant money to buy crude oil again, though nothing has been decided yet," Pathirana told LBO.

Of the 13.78 million grant, the balance funds will be used to buy ess