Sri Lanka seeks USD1B loan from China amid debt woes

COLOMBO, Sri Lanka (AP) — Sri Lanka is negotiating a USD1 billion loan from China to construct a highway linking the capital Colombo to the hilly resort city of Kandy, even as the heavily indebted South Asian island nation makes arrangements to pay down USD5.9 billion in foreign loans this year.

Finance Ministry spokesman MR Hasan said yesterday that he’s waiting to hear whether terms of the loan for the highway project have been approved. A large chunk of Sri Lanka’s foreign debt is from China, which sees Sri Lanka as a key link in its transcontinental Belt and Road infrastructure initiative.

President Maithripala Sirisena’s government had criticised the previous administration of strongman Mahinda Rajapaksa for leading the country into a Chinese debt trap.

However, the government has now turned to China to help relieve economic pressures.

A Chinese construction worker stands on land that was reclaimed from the Indian Ocean for the Colombo Port City project, initiated as part of China’s ambitious One Belt One Road initiative, in Sri Lanka. – AP