China, Sri Lanka sign loan pact on port project

(October, 31, Colombo, Sri Lanka Guardian) The Sri Lankan government and Chinas Exim Bank Tuesday signed a financial agreement to fund the Hambantota harbor project in Sri Lanka’s deep south.

According to the agreement signed by the two parties, China's Exim Bank will provide an export buyers credit of 360 million U.S. dollars for the project in Hambantota, about 240 km south east of Colombo.

Li Ruogu, chairman of Chinas Exim Bank, and P. B.Jayasundara,secretary to Sri Lanka’s Finance Ministry, signed the agreement on behalf of the two sides.

Li said his bank was very happy to support one of Sri Lanka’s largest development projects and he hoped the project a success.

“The primary tive of the Hambantota project is to synchronize different aspects of development such as shipping, trans-shipment, shipbuilding, and catering to increase exports and imports, for which the Port of Colombo does not have enough space and facilities,’ top level diplomatic source observed.

However, "China is all set to drop anchor at India's southern doorstep. An agreement has been finalized between Sri Lanka and China under which the latter will participate in the development of a port project at Hambantota on the island's south coast,” high level Indian diplomatic source told the Sri Lanka Guardian.

The Indian Ocean is a critical waterway for global trade and commerce. Half the world's containerized freight, a third of its bulk cargo and two-thirds of its oil shipments travel through the Indian Ocean. It provides major sea routes connecting Africa, the Middle East, South Asia and East Asia with Europe and the Americas and is home to several critical chokepoints such as the Strait of Hormuz and the Strait of Malacca