Colombo/New Delhi (TIP): The State Bank of India on March 17 signed an agreement for extending a credit line of $1 billion to Sri Lanka enabling it to buy food, medicine and other essential items. The agreement was signed after Union Ministers S Jaishankar and NirmalaSitharaman held discussions on economic cooperation and “issues of mutual interest’’ with Sri Lanka Finance Minister Basil Rajapaksa, said an official news release. Basil Rajapaksa visited India for financial assistance which will temporarily enable the cash-strapped Sri Lanka to stave off an unprecedented economic crisis.

On the eve of his visit, Colombo sent a positive signal by signing a joint venture with India three days back for a 100 mw solar power plant at Sampur in Trincomalee to compensate for the scrapping of an Indo-Japan coal power project on environmental grounds. On the security side, Colombo last week hosted another conference of NSAs of regional countries for a collective approach to maritime security.

In January, India had bailed out Sri Lanka from its balance of payments difficulties by extending a $400 million swap facility and deferring the settlement of $515.2 million. Thus, the help extended by India is worth over $900 million and about $1.5 billion more is in the pipeline.

Basil Rajapaksa had met PM NarendraModi for the assistance provided to Sri Lanka at this critical time. The two leaders discussed a wide range of issues pertaining to the bilateral relationship. These included agriculture, renewable energy, digitalisation, tourism and fisheries among others, said a release from the Sri Lanka High Commission.

Basil Rajapaksa also held talks with Jaishankar the same evening, which were followed by a working dinner. Rajapaksa was accompanied to the meeting by Sri Lanka’s High Commissioner to India MilindaMoragoda, Secretary to the Ministry of Finance S.R. Attygalle and Sri Lanka’s Deputy High Commissioner to India NilukaKadurugamuwa. (TNS)