The Government has refinanced USD 75 million of a USD 378 million loan taken from China’s Export-Import (EXIM) Bank in 2015 to fund upgrades to Velana International Airport (VIA).
Refinancing refers to the process of obtaining a new loan to repay an existing debt, often under more favourable terms. The new agreement was finalised on 23rd September, according to a letter from the Finance Ministry disclosed at a meeting of the Parliament’s Public Accounts Committee on Monday.
The refinanced loan, totalling USD 75,767,599.98, will carry an interest rate of two percent, with the first interest payment due on 21st January 2025. Thereafter, interest will be paid bi-annually, on 21st January and 21st July. The total interest payment amounts to USD 3.3 million.
The loan will be repaid over six years, including a three-year grace period, with final settlement required by 2030. According to the Finance Ministry, the primary purpose of refinancing is to alleviate the government’s short- and mid-term debt servicing obligations.
The original loan was taken on non-conditional terms.
