Sri Lanka at risk of losing US$ 480 million grant 

A US$ 480 million grant to Sri Lanka, to improve transportation and land information availability, from the Millennium Challenge Corporation (MCC) – an American foreign assistance agency that funds low and lower middle income countries – hasn’t been signed by the island nation, putting it at risk of losing the deal altogether, reports reveal.

The MCC grant is touted as the largest from a single source that Sri Lanka has ever received. As weak transport infrastructure and land were identified as key constraints to the country’s economic growth, this project was expected to boost the overall economic growth of Sri Lanka.


Initially set to be finalised in December, the agreement was temporarily put on hold due to the 2018 constitutional crisis.

However, questions have now been raised as the deal coincides with the renewal of two US-Sri Lanka military agreements, creating fear in the minds of local and expatriate Sri Lankans that Americans are using the programme to acquire land in Sri Lanka to set up military bases.

Dismissing all ties with the military agreements in question, and stating that the MCC is independent, bipartisan and apolitical, Jenner Edelman – Sri Lanka Resident Country Director of MCC – told reporters: “We have been waiting for cabinet approval to sign the agreement. If we can’t get the programme approved and signed, then board members may suggest that we use these resources elsewhere.”

“Come December, when it is our annual decision meeting, if the agreement is not finalised, the board may determine that Sri Lanka does not want or need the funding as it has not been approved here,” she added.

The 480 million dollars is deemed to be the largest grant offered for a maiden MCC benefactor; Malawi and Georgia had received US$ 50 and 140 million respectively.