Sri Lanka seeks US$1 billion loan from China as it struggles to recover from Easter Sunday attacks

The country is in talks with China’s Asian Infrastructure Investment Bank to provide the new loan in addition to the US$1.2 billion obtained from international agencies this year

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Construction of the China-funded Colombo Port City project in Sri Lanka. Photo: Xinhua

Published: 9:24pm, 20 Jun 2019Updated: 10:27pm, 20 Jun 2019

Sri Lanka is seeking a loan of nearly US$1 billion from China for energy and motorways as the island recovers from the devastating Easter Sunday bombings, the finance ministry said on Thursday.

Talks are underway with China’s Asian Infrastructure Investment Bank (AIIB) to raise the new loan in addition to the US$1.2 billion obtained from international agencies this year, the ministry said.

“We have been discussing with the AIIB to obtain nearly an additional US$1,000 million for further development of the Power and Highway sectors,” the ministry quoted Finance Minister Mangala Samaraweera.

Sri Lanka’s former government borrowed heavily to roll-out ports, motorways and railways, but several ambitious infrastructure projects ended up as white elephants and left the country facing a mountain of debt – mainly to China.

Unable to service its loans, the government of Prime Minister Ranil Wickremesinghe leased a Chinese-built port at Hambantota to a Beijing company for US$1.12 billion in 2017.