Chinese government approves US$1.1 billion loan to construct first phase of Sri Lanka’s Central Expressway
China’s Ambassador to Sri Lanka Cheng Xueyuan has reportedly assured Sri Lankan Prime Minister Ranil Wickeremesinghe that the Chinese government has approved a US$ 1.1 billion loan for the construction of the first phase of Sri Lanka’s proposed Central Expressway.
The Prime Minister’s Office has said in a statement that the loan was obtained from the China Exim Bank.
“The Chinese Ambassador to Sri Lanka met Prime Minister Ranil Wickeremesinghe to break the good news of the Chinese Government approving US$1 billion for phase I of the Central Expressway construction. Instructions have been given to Chinese EXIM Bank to process the loan. The Ambassador requested that the Sri Lankan side expedite administrative and legal formalities,” the statement released by the Prime Minister’s Office has noted.
The first part of the Central Expressway project from Kadawatha to Mirigama – a stretch of 37.09 km – had been delayed due to lack of funds, prompting the Road Development Authority (RDA) to call on the Government to intervene in securing loan disbursements, local media reports over the weekend have noted.
RDA officials had also raised concerns that unless the funds were obtained speedily, the expressway may not be able to meet its 2020 completion deadline.
According to the statement, Ambassador Cheng had also discussed the Hambantota port and investment zone, as well as the Colombo Port City project.
Both ventures are expected to bring in significant revenues of Foreign Direct Investment (FDI).
“With regard to Hambantota Port, Ambassador Cheng mentioned that they encourage investors to set up factories for producing high end products. The Ambassador said once started the two projects will become the engine of growth for Sri Lanka. Ambassador Cheng also requested to expedite the negotiations for signing of Chinese free trade agreement.”
The progress of Chinese-funded water projects have also been discussed during the meeting between the Prime Minster and the Ambassador.
The move by the Chinese government to grant a US$ 1.1 billion loan to construct Sri Lanka’s Central Expressway will open up many investment opportunities in the country. It will provide an excellent opportunity for raw material suppliers, man power suppliers, etc. to prepare to secure a market share. Also foreign businesses/investors could look at new real estate out of Colombo to set up businesses due to the improved accessibility provided once the expressway is constructed.
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