Sri Lanka foreign aid pipeline narrows

July 8, 2009 (LBO) - Sri Lanka's foreign aid pipeline from Western nations showed signs of narrowing amid deteriorating relations, though draw downs of previously committed aid continued apace, official data shows.
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Analysts say fresh aid commitments could arrest the trend later in the year.
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The power ministry said in June that China was giving an 891 million dollar 20-year loan for a coal power plant.

Disbursements

But committed aid was being disbursed steadily. In the five months to May 2009 Sri Lanka had drawn down 402.9 million dollars of aid including 88.

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5 million dollars of grants.

The grants came for the Netherlands (49.

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4 million US dollars), World Bank (20.5 million) and the European Union (9.
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5 million US dollars).

Last year 368 million dollars of aid was drawn down in the same period.

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In recent years Sri Lanka has taken semi-commercial financing from foreign export import banks to finance infrastructure as foreign aid becomes scarcer as diplomatic relations with the West weakens.

A loan with the International Monetary Fund has also been delayed amid political wrangling by the US and Britain.

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Meanwhile tight international capital markets also made it difficult for

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