Sri Lanka balances investments across India, China and Japan: official

Nov 23, 2016 (LBO) - Sri Lanka is internationalizing key investments in infrastructure across three Asian nations India, China and Japan, a government official said. After failing to weigh competing interests in the past, observers say the current government is on the right track to develop Sri Lanka's key infrastructure. Japan will develop the light rail (LRT) system in Colombo, with participation of Mitsubishi and Hitachi, and part of the Central Expressway, the official said. Up to four billion dollars in loans will be available at attractive rates for various projects, he said. With negative interest rates in Japan, JBIC currently offers attractive interest rates on its loans tied to Japanese companies. India will get investment in the Colombo Port, railways and the oil tank farm in Trincomalee. Although Indian companies have been slow to invest in the island -- Cairn India quit its plans to explore oil and gas in the Mannar basin in July 2015 -- this relationship is seen as crucial to the island's infrastructure development and energy security. China will build an LNG plant in Hambantota to add to its existing projects in the island such as the Colombo Port City and the Hambantota port and airport. Chinese funding for the LNG plant is expected to be about one-third the cost of alternative financing that is available. These investments are being brought according to the Swiss Challenge system, the official added.