China to lend $580 million to Sri Lanka

China Development Bank Corporation (CDB) will lend $580 million to Sri Lanka to help carry out key infrastructure projects.

The loan will bring CDB’s total lending to Sri Lanka to more than $1.4 billion. China‘s increasing influence in the island nation has stoked concerns in neighboring India.

According to the document, $300 million of the loan will be spent on developing roads and $200 million on water supply projects, with the rest going to the national business school.

It said CDB had already extended $652 million for road development projects and $214 million for an irrigation project. The loan announcement comes ahead of a four-day official visit to China by Sri Lanka President Mahinda Rajapaksa.

The $59 billion economy has increasingly relied on China for financing and technical expertise for reconstruction projects after the end of its long civil war in May 2009.

In March, China’s Export-Import Bank agreed a $278.2 million loan to finance a rail track to a port Beijing is building in Sri Lanka’s deep south of Hambantota.

China has loaned $1.5 billion for the port’s construction and $209 million for a nearby airport.

Similar port developments from Myanmar to Pakistan have raised Indian fears about Chinese political and military influence, but Rajapaksa has rejected such concerns, saying China’s presence in Sri Lanka is strictly business-related.

• China: Li Keqiang greets ‘key partner and friend’ India in New Delhi (chinadailymail.com)
• Tourism in Sri Lanka not impacted due to political tensions with India (emergingfrontiersblog.com)
• Japan Builds Sri Lanka Ties With Aso Visit as China Clout Grows – Bloomberg (bloomberg.com)
• Geostrategic Developments: US preoccupation with Sri Lanka (stratrisks.com)
• First phase of Sri Lanka’s northern railway project commissioned (thehindu.com)
• China’s submarines in Indian Ocean worry Indian Navy (chinadailymail.com)
• India concerned by China’s management of Pakistan port (chinadailymail.com)
• China to lend Sri Lanka $732m for development projects (straitstimes.com)
• Sri Lanka is no stage for India-China rivalry: Envoy (South Asia Monitor)