Colombo: Sri Lanka is seeking a loan of nearly $1 billion from China for energy and highways as the island recovers from the devastating Easter Sunday bombings, the finance ministry said. Talks are underway with China’s Asian Infrastructure Investment Bank (AIIB) to raise the new loan in addition to the $1.2 billion obtained from international agencies this year, the ministry said.
“We have been discussing with the AIIB to obtain nearly an additional $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 rollout ports, highways and railroads, 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 PM Ranil Wickremesinghe leased a Chinese-built port at Hambantota to a Beijing company for $1.12 billion in 2017.
Samaraweera said the country was able to maintain economic stability despite the April 21 attacks that killed at least 258 people at three churches and three luxury hotels. The government expects tourism to decline 30% this year as a result of the suicide bombings. The loss of revenue has been estimated at $1.5 billion.
