SRI LANKA: REQUEST FOR DEBT RELIEF UNDER TROPICAL

UNCLAS COLOMBO 001887

SIPDIS

DEPT FOR SA/INS AND OES/ETC
TREASURY FOR GEETHA RAO AND CARRIE MCKELLOGG

E.O. 12958: N/A
TAGS: EAID ECON CE ECONOMICS
SUBJECT: SRI LANKA: REQUEST FOR DEBT RELIEF UNDER TROPICAL
FOREST CONSERVATION ACT



1. This is an action request. Please see para. 3.


2. The Ambassador received the following letter dated
September 19 from K.N. Choksy, Minister of Finance and
Planning, requesting consideration under the Tropical Forest
Conservation Act (TFCA).

Begin Text: Further to the recent informal discussions held
between your staff and the Ministry of Environment and
Natural Resources, I wish to indicate that the Government of
Sri Lanka is interested in looking into the possibilities of
treating some or all of its outstanding USAID and/or PL-480
debt under the Tropical Forest Conservation Act mechanism.

Accordingly, I would be grateful if you would kindly inform
the relevant authorities of the United States Department of
Treasury of our interest in this regard and request them to
take such steps as are necessary to initiate this process.

I should stress that this initiative is being taken purely
by way of exploration of the possible benefits to Sri Lanka
and that the Government of Sri Lanka will take a decision on
this matter only after the mutual benefits and obligations
involved are fully assessed and understood. End Text.


3. Action Request: Post requests the Department of Treasury
to determine whether Sri Lanka meets TFCA eligibility
criteria. Post supports the Sri Lankan request. Please
advise.

WILLS