Sri Lanka’s Cabinet approves USD318mn Indian credit line for railway

July 27, 2016 (LBO) – Sri Lanka’s Cabinet has approved the proposed 318 million US dollars Indian credit line for the development of the country's railway sector. The credit line was proposed during the Indian Prime Minister’s 2015 official visit to Sri Lanka and will be provided through the EXIM Bank of India. Part of this credit line, 177 million dollars, will be utilized for the procurement of rolling stocks for Sri Lanka Railways while 70.5 million dollars will be used for upgrading the railway from Maho to Anuradhapura. 65 million US dollars will be utilized for upgrading the railway from Anuradhapura to Omanthai. Under the procurement of rolling stocks, 6 diesel multiple units with air conditioned passenger compartments, 30 oil tank wagons, 160 passenger coaches, 10 locomotives and 20 container carrier wagons will be purchased. Interest rate for the credit line will be 1.75 percent per annum and the repayment will be 20 years including a 5 year grace period. As per the cabinet memorandum, 75 percent of the goods and services should be sourced from India. The Central Bank has recommended the borrowing and the balance funds could be utilized for any other project mutually agreed by both governments.