Heavily-indebted Sri Lanka seeks yet more Chinese loans

Business | 4 Feb 2019 9:39 am

Sri Lanka is negotiating a US$1 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 US$5.9 billion in foreign loans this year.

Finance Ministry spokesman M.R. Hasan said Saturday that he is 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 criticized the previous administration of strongman Mahinda Rajapaksa for leading the country into a Chinese debt trap. However, the current government of Prime Minister Ranil Wickremesinghe has turned to China to help relieve economic pressures.-AP

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