IMF approves $2.6 billion loan to Sri Lanka

COLOMBO, Sri Lanka - The International Monetary Fund has given final approval for a $2.6 billion loan for Sri Lanka despite calls from human rights groups that the island nation should first address concerns over its human rights record.

Some $322.2 million of the loan will be immediately available to Sri Lanka. The balance will be distributed in phases, subject to quarterly review, the fund said in a statement Friday.

The loan is to help Sri Lanka to strengthen its fiscal position and rebuild areas devastated by a quarter-century civil war that ended earlier this year, the fund said.

But New York-based Human Rights Watch has voiced concern that Sri Lanka is holding 280,000 people displaced by the fighting in camps, following the defeat of the ethnic Tamil rebellion, and is not investigating attacks on journalists and civil society groups. Police say investigations are ongoing.

Brad Adams, the group's Asia director, Thursday called the loan "a reward for bad behavior, not an incentive to improve."

Aid groups and foreign diplomats fear that the camps are military-run internment camps where people could be held indefinitely. The government has promised to resettle 80 percent of the displaced people by the end of this year.

U.S. Secretary of State Hillary Rodham Clinton said in May that the U.S. might try to hold off the loan because of the government's actions at the end of the war.

Human rights organizations have accused Sri Lankan forces of shelling densely populated civilian areas in its offensive against the rebels — charge the government denies. The U.N. said more than 7,000 civilians were killed in the final months of the conflict, which ended in May.

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