Colombo: China has extended Sri Lanka a concessionary loan of USD 500 million, upon a request made by the government, to financially aid its efforts to combat the COVID – 19 pandemic, News 1st reported.

The finance ministry said that the Finance Ministry had inked an agreement with the China Development Bank to obtain the loan.

The loan would be given to Sri Lanka with a maturity period of 10 years and a three-year grace period along with concessionary interest rates linked to 6 Month USD LIBOR.

The agreement had been signed in the presence of Prime Minister Mahinda Rajapaksa, Chargé d’affaires of the Chinese Embassy Hu Wei, and Vice President of CDB Ma Xin.

“The inflow of the funding is set to be implemented by the end of March, and expected to increase the official foreign reserves of Sri Lanka to better manage the finance and fight coronavirus,” the statement issued by the ministry read.