The Government of the Democratic Socialist Republic of Sri Lanka and Japan International Cooperation Agency (JICA) today signed a loan agreement for an amount of JPY 10,000 million, equivalent to approximately Rs 14.45 billion.

The signing of the loan agreement took place today between Ms. Chandra Ekanayake, Deputy Secretary to the Treasury of Ministry of Finance, and Hidetoshi Irigaki, Vice President of JICA at the Ministry of Finance.

The Development Policy Loan (Private Sector Development, Governance Improvement, and Fiscal Consolidation), which is co-financed with the World Bank aims to provide support to policy and institutional reforms of the Government of Sri Lanka with a focus on reducing obstacles to private sector competitiveness, establishing more transparent and well managed public institutions and in improving fiscal sustainability of the Government. This is expected to further strengthen economic and industrial competitiveness, and thereby to contribute to sustainable economic growth of Sri Lanka.

The Government of Sri Lanka has prioritized a package of policy and institutional reforms including efforts to repeal excessive tax incentives on the revenue front, and reducing expenditures by improving transparency and efficiency in the budget process on the expenditure front. Efforts also include measures to attract foreign direct investments for the private sector to reach its full potential.

The Ministry of National Policies and Economic Affairs will be the Ministry responsible for the overall implementation of this program in cooperation with the related agencies including the Ministry of Development Strategies and International Trade, Ministry of Finance, Ministry of Parliamentary Reforms and Mass Media, the Auditor General’s Department, the Board of Investment and the Central Bank of Sri Lanka.

JICA’s loan is provided under concessional terms with an annual interest rate of 1.4% and with a 25 year repayment period.

JICA will continue to provide support for the sustainable economic growth of Sri Lanka by utilizing technical cooperation, concessional loan and grant aid.

Caption: Hidetoshi Irigaki, Vice President of JICA and Ms Chandra Ekanayake, Deputy Secretary to the Treasury of Ministry of Finance sign the agreement.