Sri Lankan Finance Minister Basil to visit India for $1 billion bailout package

Sandeep Dikshit

New Delhi, March 14

Sri Lankan Finance Minister Basil Rajapaksa will visit India on Tuesday to seek $1 billion in financial assistance to bail the island nation out of a severe economic crisis since September last year. Shopping malls have turned off power, cars have been stranded on roads and the entire country is facing a minimum of daily seven-hour power cuts.

Rajapaksa’s two planned visits this year were postponed amidst reports that Colombo has delayed delivering its side of the bargain after his virtual summit with External Affairs Minister S Jaishankar in January.

During Rajapaksa’s forthcoming visit, the two Ministers will discuss the $ 1 billion loan proposal to import food and medicines as also the earlier agreed $ 500 million credit line to import fuel from India.

On the eve of his visit, Colombo sent a positive signal by signing a joint venture with India three days back for a 100 mw solar power plant at Sampur in Trincomalee. This compensates for an earlier Indo-Japan project for a coal power project which was abandoned as Sri Lanka wants to move away from coal-fired thermal plants.

On the security side, Colombo last week hosted another conference of NSAs of regional countries for a collective approach to maritime security.

India also wants the reopening of Palay airport at Jaffna for commercial flights and is keen on taking over a renewable energy project that a Chinese company recently lost. India also wants the fishermen issue to be settled once and for all.

In January, India had bailed out Sri Lanka from its balance of payments difficulties by extending a $400 million swap facility and deferring the settlement of $ 515.2 million. Thus the help extended by India is worth over $ 900 million and about $ 1.5 billion more is in the pipeline.