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The Government of India has converted nearly $ 100 million worth of loans issued to Sri Lanka, to grants, Indian High Commissioner to Colombo Santhosh Jha said yesterday (7).
Addressing a group of media personnel at the Indian High Commission in Colombo, Jha commented on 2024, calling it a good year for Indo-Lanka diplomatic relations, adding that the partnership between both Indian Ocean neighbours had matured over the years. He also said that Indian Premier Narendra Modi had been officially invited to visit Sri Lanka in 2025 by President Anura Kumara Dissanayaka but was unable to elaborate on details of the visit.
High Commissioner Jha stated that during his visit to New Delhi, Sri Lankan President Dissanayaka had specifically thanked India for its strategic decision to convert loans to grants in order to provide further fiscal headroom to Sri Lanka.
“US Dollars ($) 20.66 million has been extended as grant assistance to settle the payments related to seven completed line-of-credit projects in Sri Lanka. Similarly, there is another important project of rehabilitation of Kankesanthurai Harbour in the Northern Province with total grant assistance from India to the tune of $ 65 million. This is also something that was to be executed through a line of credit but will now be executed through a grant. Along with $ 14.9 million for the Maho-Anuradhapura Railway Signaling Project that I mentioned earlier, more than $ 100 million of loans have been converted by India into grants. This conversion of loans to grants was also discussed in the Sri Lankan Parliament, on the return of the President, with much appreciation,” said Jha to the press.
According to the High commissioner, India’s grant assistance to Sri Lanka stands at $ 780 million at present. Out of these, completed projects are estimated to be worth $ 390 million, ongoing projects are approx. $ 211 million and committed grant projects in the pipeline stand at nearly $ 180 million. The total new assistance overall is $ 391 million.
“If you take into account the value proposition of Indian grants, we should be the principal development partner of Sri Lanka,” the top Indian diplomat in Colombo opined.
Responding to a question about the inclusion of the United Arab Emirates (UAE) into the previously bi-lateral Indo-Lanka petroleum products pipeline proposed by the Indian Oil Corporation (IOC) to construct a multi-petroleum product pipeline from the new IOC-owned refinery in Cauvery Basin, Nagapattinam, Tamil Nadu, and Sri Lanka, High Commissioner Jha said that UAE was not a new addition to the project: “UAE is not a new addition, we were discussing with them for sometime. When the MOU on the project is finalised, you will get to know what responsibilities each partner (India, Sri Lanka and UAE) will have. We think the inclusion of UAE is a good initiative, given that the country is a power, energy and global energy supplier,” Jha said, adding that the Trincomalee ‘Energy Hub’ plans will also be pursued alongside the pipeline project.