World Bank opens up lending for post-war Sri Lanka | world | Hindustan Times
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World Bank opens up lending for post-war Sri Lanka

world Updated: Dec 18, 2010 13:20 IST

The World Bank said on Saturday it has opened another lending window for Sri Lanka thanks to the improved credit worthiness of the war-ravaged island.

The Washington-based bank's Managing Director Ngozi Okonjo-Iweala announced on Friday that the island will be eligible to borrow from International Bank for Reconstruction and Development(IBRD), an arm of the World Bank.

World Bank officials say being considered for IBRD funding is a vote of confidence in the country's ability to repay.

An official with the bank in Colombo said Sri Lanka will continue to benefit from concessionary or "soft" loans from the bank's International Development Assistance (IDA), but also have access to more credit through IBRD.

"Sri Lanka is now considered a 'blend' country which can draw on IDA as well as IBRD funds," a spokesman said.

Okonjo-Iweala, who was attending the Central Bank of Sri Lanka's 60th anniversary celebrations, said they were willing to increase support to complement Sri Lanka's plan to double per capita income to 4,000 dollars in six years.

She said eligibility for IBRD borrowing was an important recognition of Sri Lanka's "middle-income" country status.

Sri Lanka's economy is set to grow by a strong nine percent in 2011, up from a projected eight percent this year and 3.5 percent in 2009 when government forces were locked in a final battle with Tamil Tiger rebels.

Since the end of the fighting last year, the economy's growth has been steadily increasing.

The World Bank said Sri Lanka's qualifying for IBRD loans meant it could expect a doubling of the current assistance which amounts to 200 million dollars a year.