News
China’s Exim bank offers US$ 1 b for Central Expressway project
China’s Export-Import Bank has extended a loan of nearly one billion dollars for the Kadawatha-Mirigama part of the Central Expressway, but the Government has to raise the money to pay the contractor’s advance.
The loan is 85 percent of the total contract of US$ 1.1 billion and Finance Minister Mangala Samaraweera wants to raise Rs 30 billion from two state banks on a Treasury guarantee. His proposal has been approved by the Cabinet of Ministers.
The 15 percent advance payment to the contractor is one of the preconditions for the EXIM bank loan.
Accordingly, arrangements have been made to obtain two loans from the People’s Bank and the Bank of Ceylon to finance 15 percent of the contract price of the project. The Bank of Ceylon will provide a loan of Rs 12 billion and the People’s Bank Rs 18.9 billion.
The Bank of Ceylon will charge an annual interest rate of two percent with a repayment period of 15 years, including a grace period of four and half years, while the People’s Bank will provide the loan at an interest of 2.25 percent repayable in 15 years and a grace period of three years.
The Central Expressway’s section 1 spanning 37.09 km is scheduled to be completed in June next year.
Meanwhile, the Cabinet has also given approval to bring part of stage III — Mirigama to Kurunegala – to stage two in view of delays in finalising a loan from the Japanese Government.