COMBank supports national development with IFA loan

Commercial Bank of Ceylon has become the first bank in Sri Lanka to support national development initiatives with concessionary long-term lending from its Investment Fund Account (IFA) set up in accordance with a proposal by President Mahinda Rajapaksa in the 2011 budget.

The Bank will provide a Rs 1.5 b loan to the Road Development Authority (RDA) payable over 14.5 years, in the first ever disbursement from the IFA scheme proposed in the National Budget of November last year.

The funds will be used in a two-and-a-half year project to rehabilitate/improve a 21.5 km stretch of the A6 highway between Dambulla and Habarana, under the government's infrastructure development program, the Bank said.

International Construction Consortium (Pvt) Ltd (ICC), is the designated contractor who is also a key client of the Bank.

The Department of External Resources of the Ministry of Finance and Planning under the direct supervision of the Secretary to the Treasury, Dr. P B Jayasundera facilitated the successful arrangement of the loan.

As envisaged by the IFA scheme, an agreement covering this loan was entered into on August 30, by the Commercial Bank and the Road Development Authority.

The loan will be disbursed in stages as the project progresses, and will be the first of several to be disbursed from the Commercial Bank's IFA for projects designated to be accommodated under the Fund.

Consequent to the ratification of these proposals, state institutions can now borrow direct from local banks instead of being dependent on Treasury borrowings from foreign institutions, leading to benefits such as savings of foreign currency, faster disbursements and the active participation of the lending banks in monitoring progress of projects.