Business

Loans for my projects don’t add to debt burden so much: President

President Maithripala Sirisena said that loans taken for agricultural development projects initiated by him are different from loans taken for other major investments, as they have longer repayment periods and his projects offer faster returns.

“These loans taken for agricultural development are different to the loans taken for other massive investments which show a return on investment only in 5-10 or 15 years. The debt burden is not exacerbated by this because the return on investment is very clear. These projects give returns in three or four months with the crop yield.”

He made these comments at an event held to announce the inauguration of Stage II of the Wayamba Ela Project, scheduled for 24 August. Under this scheme, waters from the Mahaweli will be diverted from the Eastern Province to the Northern Province.

He suggested that the benefit to poverty stricken farmers from projects such as this and Moragahakanda outweigh any debt burden it places on the Treasury.

“More than any burden this may place on the Treasury in terms of pure economics, these kinds of projects fill the hearts of poor farmers. When they reap the rewards of these projects their hearts are filled as well as their stomachs. Debt is a different issue.”

He went on to say that the repayment periods of these loans are longer than previous development projects, and that this would ensure debt servicing would not be a major issue.

“These have long term repayment terms; not to pay back tomorrow or day after. These are long term investments.”

President added that the continuation of the Wayamba Ela Project will not be an issue as there are many friendly nations and international financial institutions who are willing to lend to his projects.

“International financial institutions will give money gladly if they see work being done and that there is no corruption. This project has been funded by China, Japan, Saudi, Kuwait, and the Asian Development Bank (ADB). We have no issues with funding. We can continue these projects without any issue.”

Sri Lanka’s total outstanding external debt stock stood at $ 31.6 billion in April 2018 and the Government says it has already completed 25% of external debt service payments for this year as of 30 April, out of the estimated $ 2.9 billion overall debt service for 2018. (CC)