China Exim lends Sri Lanka $307 mn to build port

Sri Lanka said on Thursday it is borrowing $307 million from China's Export-Import Bank to build a port that the government hopes it can develop into a trans-shipment centre similar to Singapore.

The port will be located in the southern town of Hambantota in the constituency of President Mahinda Rajapaksa in the island's far south.
The government plans to offer offshore facilities such as ship handling, water and fuel supplies and crew changes.

"There are about 200 ships sailing close to Hambantota on a daily basis. With the development of this port we can bring more business to Sri Lanka," cabinet spokesman Anura Priyadarshana Yapa told a media briefing.

The port will be expanded to handle 20 million containers annually.

Singapore, a major trade centre between Asia and the rest of the world, handled 24.8 million containers in 2006, the city-state's government said earlier this year.

The 15-year Sri Lanka loan carries an interest rate of 6 month Libor plus 0.9 per cent, the cabinet spokesman said.

The port is one of a several infrastructure projects the government has announced. The state is also negotiating a separate $400 million expansion of the island's main port in Colombo.