China Finances Sri Lanka's Expressway with Largest Ever Single Loan of $989 Mln

Sri Lanka has accepted another huge loan of $989 million from China's EXIM Bank for the Central Expressway project which will connect the country's more rural areas with its economically developed provinces.

New Delhi (Sputnik): Sri Lanka's Finance Ministry on Friday signed a concessional loan agreement valued at $989 million with China's EXIM Bank for the Central Expressway project.

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The loan will cover 85 per cent of the cost for section one of the infrastructure project.  

"The total estimated cost of the project is $1.164 billion. Furthermore, this loan is the single largest loan approved by the EXIM Bank for Sri Lanka," a Sri Lankan Finance Ministry statement reads.

The Central Expressway runs through the central part of Sri Lanka, connecting the western, northwestern, central and the Sabaragamuwa provinces with other densely populated and economically developed provinces. 

"Under the Belt and Road Initiative, we have accomplished a series of inclusive and sustainable win-win results. In view of the two countries' traditional friendship and at the strong request of the Sri Lankan government, the loan agreement for the first phase of the Central Expressway was signed after prudent assessment," Ambassador Cheng said.

Sri Lanka has remained undeterred by reports of growing Chinese loan burden despite the poor performance of the Hambantota port under the Belt and Road Initiative. Currently, more than 90 per cent of Sri Lankan government revenue is going towards servicing debt. 

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Meanwhile, apprehensive of growing Chinese investments in Sri Lanka, India has expedited its investments in its southern neighbour in terms of developing energy infrastructure and housing projects in the northern part of the country.

China, for its part, has said that it has no qualms involving other partners like India to help boost Sri Lanka's development.

"China adopts an open attitude toward the mutually beneficial cooperation between Sri Lanka and India as well as other parties. China stands ready to work with India and other relevant sides to help boost Sri Lanka's development. In foreign relations, China is more broad-minded than you might have imagined," Geng Shuang, spokesperson for the Chinese Foreign Ministry, told reporters on Thursday.