NDB provides Rs. 2.5b to boost plantations sector

The National Development Bank (NDB) has approved Rs. 2.5 billion to strengthen the plantation sector under a credit facility.

The NDB has played a significant role in funding the plantations sector of Sri Lanka. Sri Lanka's endeavour to improve the plantations sector has been facilitated through dedicated credit lines from multilateral agencies such as Asian Development Bank (ADB).

Two such major credit lines were made available to Sri Lanka by ADB, i.e Plantations Sector Reform Project (PSRP) during the late 1990s to reform the plantation sector and the Plantation Sector Development Project (PDP) to boost the sector which was reformed.

"The NDB as a development financier has played a noteworthy role under these schemes. Most importantly, it played the role of a financial partner to the private sector, which was at that time embarking on a nationally important project of reviving the plantations sector," a spokesman for the bank said.

"It provided long tenure loans needed for field development and factory modernisation.

The tenure of these loans extended up to 15 years inclusive of a long grace period up to five years. Total facilities approved by the NDB under this credit line amounted to approximately Rs 2.5 billion," he said.

The NDB also played a project partner role where advice on project management and legal aspects were made available to the RPCs.

Considering the long period taken for new planting and replanting to come to bearing and harvesting stage, these investments also need long tenures to earn a return. Inadequate long term financing has been an impediment to the progress of the sector. Low cost funding is important for field development in the plantations sector.