India delays new US$ 500M fuel credit line

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A government spokesman told Finance Today that there were signs of further delays in reaching a final agreement to obtain an additional USD 500 million loan to import petroleum products from India.

A discussion was scheduled on 12 June to reach a final agreement in this regard with the Indian Government, but the spokesman said the talks were later postponed indefinitely.

The main reason for this was a controversial statement made by outgoing Chairman of the Ceylon Electricity Board (CEB), M.M.C. Ferdinando recently that there was pressure from the Indian Prime Minister to hand over the proposed Mannar and Pooneryn Wind and Solar Projects in Sri Lanka to Indian Adani Green Energy Limited.

“This was a very much disappointing matter for India. In response, final agreements on obtaining loans for fuel imports would be further delayed,” he said.

Ferdinando, who was addressing the Committee on Public Enterprises (COPE), can be heard saying that President Gotabaya Rajapaksa “told me that he was under pressure from Indian Premier Modi.” The senior official told the committee that the President had asked him to give the project to the Indian company.

He also told the committee that CEB has never given unsolicited proposals in the past, even on a government-to-government basis.

But the day after his appearance before COPE, Ferdinando withdrew his statement, claiming he had become ‘emotional’ due to some of the questions he was asked that appeared to insinuate wrongdoing by him.

President Rajapaksa, meanwhile, tweeted: “Regarding the award of a Wind Power Project in Mannar, I categorically deny authorisation to award this project to any specific person or entity. I trust responsible communication in this regard will follow.”

Later, the President’s Office issued a longer statement, ‘vehemently denying’ influencing anybody in awarding the project. The statement said Rajapaksa “categorically stated that he had not at any time given authorisation to award a wind power project in Mannar to any person or any institution.

“The President vehemently denied the statement made by the Chairman of the Ceylon Electricity Board at the Parliamentary Committee on Public Enterprises in this regard.”

The statement also said: “Sri Lanka is currently in an acute shortage of power and President desires to expedite implementation of mega power projects as early as possible. However, no undue influence will be used in awarding such projects. Project proposals for large-scale renewable energy projects are limited, but special attention will be paid to the selection of institutions for the projects, which will be carried out strictly in accordance with the transparent and accountable system by the Government of Sri Lanka.”

India has extended credit lines worth USD 700 million so far for fuel imports, as part of the up to USD 6 billion assistance extended since January, and delivered over 500,000 MT of fuel.

The Sri Lankan Cabinet recently granted approval for the proposal submitted by the Minister of Electricity and Energy to obtain a series of short-term loan facilities worth another USD 500 million with the assistance of the Indian Exim Bank to purchase petroleum products required by the country, settling the forex shortage at present.

By Ishara Gamage

Ferdinando resigns as CEB Chairman

M.M.C. Ferdinando  resigned yesterday as the Chairman of the Ceylon Electricity Board (CEB).

CEB Vice Chairman Nalinda Illangakoon took over as the new Chairman of the Ceylon Electricity Board.