Lanka to attract record foreign investment

COLOMBO: Sri Lanka expects to attract a record level of foreign direct investment this year, the Government said. For the first eight months of the year, US$ 340 million (euro 271 million) has flowed into the country, well above last year's foreign direct investment total of US$ 285 million (euro 227 million), authorities said.

"The performance so far is encouraging," Investment Promotion Minister Rohitha Bogollagama told reporters yesterday.

Sri Lanka's investment arm, the Board of Investment, has set a full-year target of US$ 500 million (euro 398 million) to US$ 600 million (euro 478 million), down from an original forecast of US$ 1 billion (euro 797 million) made at the start of the year.

Analysts say they believe the Government will be able to achieve the full-year target despite security fears and a lagging peace process.

Bogollagama said the January-August total consisted mostly of investment in telecommunications, garments and business process outsourcing.

As part of efforts to spur investments and attract bigger investors, the BOI raised the minimum foreign direct investment requirement in March to US$ 250,000 (euro 199,000) per company, from US$ 50,000 (euro 39,900) previously.

The BOI's original target of US$ 1 billion included a planned coal power project - worth US$ 400 million (euro 319 million) to US$ 450 million (euro 359 million) - by National Power Thermal Corp. of India, which has since been delayed until at least next year.

"Investors would probably be encouraged by economic factors like high interest rates, so we expect the government's full year FDI to reach around US$ 525 million (euro 419 million)," said SC Securities analyst S. Umasudhan.