Tuesday 24 June 2014

Sri Lanka's NDB ups IFC-backed funding to US$200mn

June 24, 2014 (LBO) - Sri Lanka's National Bank Plc raised 75 million US dollars with backed by the International Finance Corporation adding to 125 million dollars raised in March, officials said.

The proceeds will be used to finance up to 50,000 micro and small scale enterprises.

The IFC itself gave 20 million US dollars and it syndicated a 105 million US dollar loan with six international banks from several development lenders.

Another 75 million US dollars have been raised from Germany's DEG, Oesterrieichische Entwicklungsbanks (OeEB) of Austria, OPEC Fund for International Development, FMO of Netherlands and the Swiss Investment Fund for Emerging Markets (SIFEM).

"The long tenor of the syndication enables us to pas on this benefit to our clients," NDB Chief Executive Officer Rajendra Theagarajah said.

He said the funding will go to leisure, value added exports, construction, logistics and knowledge services and matching the 'five hubs' growth strategy of the country.

NDB will give loans up to 8 years, with a 'suitable grace period' at 'meaningful and affordable' rates, he said.

The bank already has a 'pipeline' of foreign currency denominated loans and the Central Bank also gave a partial foreign currency hedge, Theagarajah said.

IFC's Ehsanul Azim said it is the largest single finance done for Sri Lanka.

He said it showed the confidence of investors in Sri Lanka and the governance and business model of NDB.

Development lenders from Austria, Switzerland were coming for the first time to Sri Lanka, Theagarajah said.

Their exposure to the country will open the road to other firms also to tap them, he said.

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