China’s Export Import bank has approved a $1bn loan to build the Central Expressway, a motorway between the Sri Lankan capital of Colombo and the central city of Kandy.
The loan, which is expected to cover 85% of the total contract price, was agreed between Cheng Xueyuan, China’s ambassador to Sri Lanka on behalf of the bank, and RHS Samarathunga, treasury secretary.
The Central Expressway will stretch about 136km and will be part of Sri Lanka’s national highway network plan.
China agreed the loan on concessionary terms after rounds of "fair and professional negotiations", according to the Chinese Embassy in Colombo.
China’s dealings with Sri Lanka have been criticised as "debt-trap diplomacy" since it took over the southern port of Hambantota on a 99-year lease after the Sri Lanka government struggled to repay a $1.3bn loan for its construction.
The port has since become a linchpin of the Belt and Road project, intended to improve communications between Asia, Europe and Africa.
Image: The central city of Kandy (Calflier001/CC BY-SA 2.0)
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