Bonds News

China approves $1 bln loan for Sri Lanka highway - Sri Lanka PM's office

COLOMBO, May 14 (Reuters) - The Chinese government has approved a $1 billion loan to Sri Lanka to build a highway and its export-import bank has been instructed to process the borrowing, Sri Lankan Prime Minister Ranil Wickremesinghe’s office said on Monday.

It will be one of the largest projects undertaken by the China in the island nation, which is backing China’s Belt and Road Initiative (BRI).

The Prime Minister’s office said Cheng Xueyuan, China’s ambassador to Sri Lanka, met Wickremesinghe and broke the “good news” of the Chinese government approving funding for construction of the first phase of the central expressway.

“The ambassador requested the Sri Lankan side to expedite administrative and legal formalities,” the prime minister’s office said in a statement.

Xueyuan’s meeting with the prime minister comes three days after he met President Maithripala Sirisena.

“The president highlighted that Sri Lanka strongly supports the belt and road initiative, and attaches great importance to the joint mega-projects of Colombo Port City as well as the Hambantota Port and Industrial Park,” a Chinese Embassy statement said on Saturday.

It also said instructions have been given to concerned government departments by the president’s office to accelerate the resolution of specific issues and make solid progress in the projects.

Many Chinese projects including the $1.4 billion port city reclamation deal were suspended soon after president Sirisena took the office in January 2015 citing incorrect procedures by the previous government amid corruption allegations.

However, the port city project was allowed to resume after a nearly two year delay following fresh environmental impact assessments. The Sri Lankan government later leased a Chinese built deep sea port in southern Hambantota for $1.12 billion on a 99-year lease amid mounting debt crisis. (Reporting by Shihar Aneez; Editing by Toby Chopra)