Business

Despite huge debt, Sri Lanka seeks $1 billion from China to finance highway project

AP

Sri Lanka is negotiating a $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 $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, Sirisena’s government has itself turned to China to help relieve economic pressures.