Sri Lanka Economic Crisis
India grants $500 million credit line to Sri Lanka to overcome fuel crisis
Colombo: India has extended $500 million credit line to Sri Lanka to buy fuel as the island nation grapples to tide over its worst financial criss in decades, media reports said.
Sri Lanka doesn't have enough foreign exchange crisis to fund its fuel purchases amid a deepening power and energy crises. India's $500 million assistance comes in the wake a virtual meeting between the External Affairs Minister S Jaishankar and the Minister of Finance Basil Rajapaksa on January 15, 2022, the Indian High Commission in Colombo said.
The Government of Sri Lanka (GOSL) and the Export Import Bank of India (EXIM) signed the Line of Credit (LOC) agreement for purchase of petroleum products on February 2, 2022, in the presence of Minister of Finance Basil Rajapaksa and High Commissioner of India to Sri Lanka, Gopal Bagalay, it said in a press release.
With this, India's overall development support to Sri Lanka stands close to $4 billion, it added.
Last week, India had also granted Sri Lanka a USD 400 million swap arrangement to boost its reserves.
On Tuesday, Sri Lanka decided to buy 40,000 metric tonnes each of petrol and diesel from the Indian Oil Corporation's (IOC) Sri Lanka subsidiary, Lanka IOC (LIOC) to overcome its fuel and energy crisis.
Already, power cuts are being imposed in the country at peak hours and the state power entity because of fuel shortage.
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