Rail Finance

Sri Lanka's Prime Minister Ranil Wickremesinghe arrives with flowers to receive blessings at the Gangaramaya Buddhist Temple, Colombo, Sri Lanka on Wednesday 4 April 2018. On wednesday (4), Wickremesinghe survived a no-confidence motion in the Sri Lankan parliament with a 46 vote majority after a 12-hour debate with 122 MPs voted in his support while 76 MPs voting to remove the prime minister. (Photo by Tharaka Basnayaka/NurPhoto via Getty Images)

Aug 23, 2012 (LBO) – China will give a 278 million credit to finance a railway track from Matara in Sri Lanka’s South to Beliatta, cabinet spokesman minister Keheliya Rambukwelle said. The Exim Bank will provide 200 million US dollars under preferential buyers credit terms and the government of China will give a concessional loan of 508 million yuan.

China Exim Bank’s preferential buyers credit usually come with only 2.0 percent interest and 20 year payback with 5 or 7 year’s grace period, a half percent management fee and commitment fee.

The project involves building 26.75 kilometres of track, bridges, stations underpasses and overpasses. It is part of a plan to connect Matara with Kataragama.

Sri Lanka will have to bear a slightly higher cost with repaying renminbi loans as the Chinese currency is set to appreciate against the US dollar.

US Mercantilists have put pressure on China to appreciate the currency falsely claiming that the Renminibi is undervalued.