Sri Lanka is likely to lose the USD 480 Million Millenium Challenge Corporation (MCC) compact, the largest funding ever received by Sri Lanka, due to President Maithripala Sirisena's opposition to the agreement, top political sources said.

At the last Cabinet meeting, President Sirisena directed to postpone the signing of the agreement to January, next year, indicating that he prefered the MCC compact to proceed under a new President.

"Sri Lanka’s continued eligibility for the $480 million grant will be discussed at MCC’s upcoming Board meeting on September 18, 2019. If it appears that Sri Lanka no longer needs the $480 million grant — four months have gone by since MCC Board approval, with Sri Lankan cabinet approval still pending week after week— it is highly likely that MCC’s Board will determine to reallocate the $480 million grant to a different eligible country," a source familiar with the matter told Asian Mirror.

Sri Lanka has until mid-September when MCC’s Board next meets to get cabinet approval and secure the $480 million grant investment it requested, which will directly benefit an estimated 11 million Sri Lankans.

"Because this grant was negotiated with Sri Lanka and approved by MCC long before Sri Lanka’s graduation to UMIC status, MCC is committed to providing the full $480 million to Sri Lanka if the Government approves the grant now," our source also said.

Waiting for the conclusion of the Presidential election, he said, is not a favourable option. MCC’s Board annual country selection meeting is in December, and Sri Lanka will not be amongst the list of eligible countries for grant funding then, given its recent graduation from MCC’s eligible country candidate pool.

The Government of Sri Lanka has been working to finalize a $480 million grant with MCC to improve urban and rural transport infrastructure and land administration and stimulate economic growth. All of the projects and activities in the $480 million grant program were proposed by the Government of Sri Lanka, based on a study by the Harvard University on key constraints to Sri Lanka’s economic growth, after extensive consultations with Sri Lankan private sector, think thanks, civil society, universities, government ministries and departments.