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$ 135 m Russian defence LOC to buy fuel?

06 Mar 2022

 
  • SL Ambassador in discussions with Russian officials
  By Skandha Gunasekara The Sri Lankan Government is looking at utilising an already existing $ 135 million Russian defence Line Of Credit (LOC) to purchase essential items such as fuel, The Sunday Morning learns. State Minister of Foreign Affairs and Regional Cooperation Tharaka Balasuriya told The Sunday Morning that the Government was in discussion with Russia on using the $ 100 million-plus defence LOC to purchase essential items. “Our Ambassador to Russia was recently in Sri Lanka, and he said that he had raised the matter with the Russian authorities and that they had been a little reluctant. However, we don’t need to make any defence purchases at this juncture, so we will negotiate on using the credit line to buy essential commodities such as fuel,” Balasuriya told The Sunday Morning. In 2021, it was reported that the Ministry of Defence was looking to procure helicopters for use in peacekeeping missions. However, the State Minister noted that the matter of when to use the LOC for defence purchases was up to the Ministry of Finance, and that at this moment in time, such expenditures were not a priority. “The Ministry of Finance will have to discuss the matter with the Ministry of Defence, but at this moment we don’t need to buy helicopters.” A $ 300 million credit line was extended by the Russian Government to Sri Lanka, from which 14 Mi-171E and Mi-171Sh helicopters were bought in 2010, some of which are used in UN Peacekeeping Operations. From the LOC, a balance of $ 135 million remains, which was to be used in 2021 to purchase additional helicopters. However, the deal had not been concluded.  According to Balasuriya, the Government plans to use the remaining $ 135 million to import essential items such as fuel from Russia if the Russian Government agrees to Sri Lanka’s request. According to the Sri Lanka Air Force, the peacekeeping missions which the helicopters were used for over the last eight years have brought in approximately $ 120 million in payments to the Treasury as of December 2021.  


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