GOSL Appoints DFCC Bank as Administrator of European Investment Bank’s EUR 90 million to Sri Lanka
April 7, 2014
The agreement being exchanged between Dr. P.B. Jayasundera, Secretary to the Ministry of Finance and Planning and Mr. Arjun Fernando, Chief Executive Officer – DFCC Bank
The Government of Sri Lanka has appointed DFCC Bank to administer the new credit line of EUR 90 million extended to Sri Lanka by the European Investment Bank. The management mandate agreement and the on-lending agreement were exchanged between DFCC Bank and the Ministry of Finance and Planning on the 4th of April 2014.
The European Investment Bank (EIB) is owned by the member states of the European Union. DFCC Bank, the country’s pioneer development bank with a 60 year track record has had a long standing relationship with EIB, and in the past had dedicated two credit lines exclusive to DFCC amounting to EUR 40 million followed by EUR 50 million. DFCC also managed the multi bank EUR 60 million EIB Post Tsunami credit line.
Dr. P.B. Jayasundera, the Secretary to the Ministry of Finance and Planning commented, “While the credit line will give an impetus to the long-term funding base of the country, Banks are encouraged to pursue other avenues of raising funds overseas on their own accord to meet their funding requirements.”
Funds from the credit line will be utilised to develop the Small & Medium Enterprise (SME) sector and to encourage renewable energy based power generation schemes and energy efficiency measures. Beneficiaries can obtain long term loans at very attractive interest rates. The minimum eligible project cost has to be the equivalent of EUR100,000 for an SME and EUR500,000 for a renewable energy or energy efficiency project
“We are privileged to be mandated as the Administrative Unit and I believe DFCC Bank’s excellent track record of managing credit lines in the past made us the natural choice for administering the new EIB SME/Green Energy credit line”, Commented Mr Arjun Fernando, CEO, DFCC Bank. The Bank has been in the forefront of financing renewable energy schemes in the country. In the recent past, DFCC has administered the EIB Post Tsunami Credit line, the KfW Credit line for SME Development in the North and East and the World Bank and the Global Environment Facility assisted Energy Services Delivery (ESD) Project and Renewable Energy for Rural Economic Development (RERED) Project. The ESD project was rated as ‘Highly Satisfactory’ – a rating given for exceptional performance by the World Bank. The performance of the RERED Administrative Unit was also rated as Highly Satisfactory.
The ESD and RERED Project are considered as ground breaking renewable energy projects and the successful model has been replicated in many other World Bank projects throughout the world. The projects were highlighted in case studies by the Lee Kwan Yew School of Public Policy of the National University of Singapore (2011) and the United Nations Development Programme (2012). In 2012, the Bank was invited to participate in a South-South Knowledge Exchange Conference in Bali, Indonesia. The Bank has also hosted study teams from various countries including India, Nepal, Philippines, Cambodia, Mozambique, Ghana and Uganda.