Completed Development AidData Chinese Aid

CDB provides $300 million loan for Rehabilitation and Improvement of Priority Road Project 3 - Phase I (PRP3-I) (Linked to Record ID#46971, #39001 and #39002)

$300M USD

Funder	China Development Bank (CDB)
Recipient Organization	Government of Sri Lanka
Country	Sri Lanka
Start Date	Mar 11, 2014
End Date	Mar 07, 2026
Duration	4,379 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`33402`

Grant Description

CDB provides $300 million loan for Rehabilitation and Improvement of Priority Road Project 3 - Phase I (PRP3-I) On March 11, 2014, China Development Bank (CDB) and the Government of Sri Lanka signed a $300 million loan facility agreement [No. 4510201401100000245] for the Rehabilitation and Improvement of Priority Road Project 3 - Phase I (PRP3-I).

📋 Loan / Grant Terms

💰 Loan Amountcarried the following borrowing terms: a 15 year maturity

📅 Maturity15 years

⏳ Grace Period3 years

The loan was apparently secured by (i.e. collateralized against) cash deposits in an escrow account.

The borrower was expected to use the proceeds of the CDB loan to partially finance (a) a commercial contract [ID# RDA/RNIP/PRP3/PHASE1/PACKAGE-4] between Sri Lanka's Road Development Authority (RDA) and Hunan Construction Engineering Group Corporation, which was signed on December 9, 2013; (b) a commercial contract [ID# RDA/RNIP/PRP3/PHASE1/PACKAGE-3] between Sri Lanka's Road Development Authority (RDA) and Xi'an Dagang Road Machinery Company, which was signed on December 9, 2013; (c) a commercial contract [ID# RDA/RNIP/PRP3/PHASE1/PACKAGE-2] between Sri Lanka's Road Development Authority (RDA) and China National Aero Technology Corporation Engineering (CATIC), which was signed on December 9, 2013; (d) a commercial contract [ID# RDA/RNIP/PRP3/PHASE1(LOT2)/PACKAGE/C13] between Sri Lanka's Road Development Authority (RDA) and Xi'an Dagang Road Machinery Company, which was signed on January 21, 2014; (e) a commercial contract [ID# RDA/RNIP/PRP3/PHASE1(LOT2)/PACKAGE/C12] between Sri Lanka's Road Development Authority (RDA) and China National Aero Technology Corporation Engineering (CATIC), which was signed on January 21, 2014; and (f) a commercial contract [ID# RDA/RNIP/PRP3/PHASE1/PACKAGE-1] between Sri Lanka's Road Development Authority (RDA) and China National Aero Technology Corporation Engineering (CATIC), which was signed on December 9, 2013.

CDB deposited $300 million in an account controlled by the Central Bank of Sri Lanka on March 28, 2014. $149.36 million was disbursed in 2014 and 2015. $62.22 million was disbursed in 2016. The loan had achieved a 70.5% disbursement rate ($211.58 million out of $300 million) as of December 31, 2016.

CDB disbursed $38,776,132.78 in 2017, $16,985,442 in 2018, $10,986,251 in 2019, $8,138,925 in 2020, and $13,533,826 in 2021. The loan had achieved a 100% disbursement rate ($300,000,576.78 out of $300,000,000) as of December 31, 2021.

The borrower made repayments worth $23,100,000 in 2018, $23,100,000 in 2019, $23,100,000 in 2020 and $23,100,000 in 2021.

The loan's amount outstanding was $227,255,064 as of December 31, 2017, $221,140,506 as of December 31, 2018, $209,026,757 as of December 31, 2019, $194,065,682 as of December 31, 2020, $184,499,508 as of December 31, 2021, and $172,949,508 as of June 30, 2022. By early 2022, it was clear that the loan was non-performing.

On April 12, 2022, the Government of Sri Lanka announced a ‘pre-emptive’ sovereign debt default, noting that it would suspend debt repayments to all external creditors other than multilateral institutions.

Its decision to suspend external debt service reportedly affected all China Development Bank loans with amounts outstanding at the time of the announcement. By March 2023, the Government of Sri Lanka had accumulated $338 million in arrears to China Development Bank. PRP3 Phase I was divided into two parts, A and B.

The contractors for PRP3-Phase I (A) were China National Aero-Technology International Engineering (CATIC - ENG) and Xi'an Dagang Machinery Co. Ltd. The contractors for PRP3-Phase I (B) were CATIC and Hunan Construction Engineering Group Corporation (Hunan). Under PRP3- Phase I (A), 6 roads were rehabilitated: 1.

Ratnapura - Palawela - Karawita Road: 00.00km - 21.28 km 2. Veyangoda -Ruwanwella Road: 12.4 km - 32.2 km (19.8 km total length). This section also included the rehabilitation of a bridge. 3. Meegahajandura-Kumaragama Road: 0.00 km - 8.8 km 4. Galle-Udugama Road: 0.00 km - 35.35 km 5. Hiniduma-Opatha-Pitabaddara Road: 0.00 km - 31.5 km.

This section also included the rehabilitation of a bridge. 6. Mawanella-Hemmathagama-Gampola Road: 0.00 km - 26.00 km. Under PRP3 - Phase I (B), 6 roads were rehabilitated: 7. Kiriella-Nedurana-Eheliyagoda Road: 0.00 km - 14.75 km. Contractor: CATIC 8. Ratnapura-Wewelwatte Road: 0.00 km - 27.50 km. Contractor: CATIC 9.

Kandy-Jaffna Road: 1.65 km - 3.9 km (2.25 km total length). Contractor: Hunan 10. Marawila-Udubaddawa Road: 0.00 km - 19.55 km. Contractor: Hunan 11. Rambukkana-Katupitiya Road (0.00 km - 9.81 km) and Dambokka-Katupitiya Road (0.00 km - 8.75 km).

These two roads were rehabilitated at the same time and are considered the same project by the Sri Lanka Ministry of Highways and Investment. Contractor: Hunan 12. Ayagama-Egaloya Road: 0.00 km - 23.00 km.

PRP3 Phase I commenced its activities on September 9, 2014 and it was originally scheduled to reach completion by July 17, 2017. However, as of September 30, 2019, PRP3-II was still ongoing. The completion date of the project was extended to 31 December 2020.

As of that date, the rehabilitation works of 12 roads 248.34 km and other 15 roads 72.45 km from variation orders were complete.

📋 Staff Comments

CDB funded three additional phases of the Priority Road Project. See Project ID#46971 (PRP1), Project ID#39001 (PRP2), and Project ID#39002 (PRP3-Phase 2) for more details.
For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
The commercial contract [ID# RDA/RNIP/PRP3/PHASE1/PACKAGE-4] between Sri Lanka's Road Development Authority (RDA) and Hunan Construction Engineering Group Corporation, which was signed on December 9, 2013, can be accessed in its entirety via https://www.dropbox.com/s/p8vglehhuf9c39c/PRP03Ph01Pack04Vol01-SignedContract-2013.pdf?dl=0 and https://www.dropbox.com/s/ymqhh4yslut9c4j/PRP03Ph01Pack04Vol02-ConditionsofContract-2013%20%282%29.pdf?dl=0 and https://www.dropbox.com/s/t1uujfhwli9n0w1/PRP03Ph01Pack04Vol03-TechspecStandardspec-2013.pdf?dl=0 and https://www.dropbox.com/s/szga99dtogyirq9/PRP03Ph01Pack04Vol04-Drawings-2013.pdf?dl=0 and https://www.dropbox.com/s/o6tdbc3pbr0zpx3/PRP03Ph01Pack04Vol05-ScopeBOQ-2013.pdf?dl=04. The commercial contract [ID# RDA/RNIP/PRP3/PHASE1/PACKAGE-3] between Sri Lanka's Road Development Authority (RDA) and Xi'an Dagang Road Machinery Company, which was signed on December 9, 2013, can be accessed in its entirety via https://www.dropbox.com/s/ao9au6zpyfevvwf/PRP03Ph01Pack03C03Vol02-ConditionsofContract-2013%20%281%29.pdf?dl=0 and https://www.dropbox.com/s/urdt49nfilpjaxi/PRP03Ph01Pack03C03Vol03-TechspecStandardspec-2013.pdf?dl=0 and https://www.dropbox.com/s/sj86f09ciy7v2al/PRP03Ph01Pack03C03Vol04-Drawings-2013.pdf?dl=0 and https://www.dropbox.com/s/klxu5eqbvkq8vdo/PRP03Ph01Pack03C03Vol05-ScopeBOQ-2013.pdf?dl=0 and https://www.dropbox.com/s/nfmztilnfwvja3h/PRP03Ph01Pack03C09Vol01-SignedContract-2013.pdf?dl=05. The commercial contract [ID# RDA/RNIP/PRP3/PHASE1/PACKAGE-2] between Sri Lanka's Road Development Authority (RDA) and China National Aero Technology Corporation Engineering (CATIC), which was signed on December 9, 2013, can be accessed in its entirety via https://www.dropbox.com/s/3mma2x6wl11k2mz/PRP03Ph01Pack02Vol05-ScopeBOQ-2013.pdf?dl=0 and https://www.dropbox.com/s/87r8jebwj1f7ndz/PRP03Ph01Pack02Vol03-TechSpec-2013.pdf?dl=0 and https://www.dropbox.com/s/6xs17tb2u4geoep/PRP03Ph01Pack02Vol02-ConditionsofContract-2013.pdf?dl=0 and https://www.dropbox.com/s/3oj5rav5rkbo2rz/PRP03Ph01Pack02Vol01-SignedContract-2013.pdf?dl=06. The commercial contract [ID# RDA/RNIP/PRP3/PHASE1(LOT2)/PACKAGE/C13] between Sri Lanka's Road Development Authority (RDA) and Xi'an Dagang Road Machinery Company, which was signed on January 21, 2014, can be accessed in its entirety via https://www.dropbox.com/s/9yrgto8qiqqhlj5/PRP03Ph01Lot02PackC13Vol01-SignedContract-2014.pdf?dl=0 and https://www.dropbox.com/s/lnbqpturistrndt/PRP03Ph01Lot02PackC13Vol05-ScopeBOQ-2014.pdf?dl=07. The commercial contract [ID# RDA/RNIP/PRP3/PHASE1(LOT2)/PACKAGE/C12] between Sri Lanka's Road Development Authority (RDA) and China National Aero Technology Corporation Engineering (CATIC), which was signed on January 21, 2014, can be accessed in its entirety via https://www.dropbox.com/s/emheyhvqf0xckns/PRP03Ph01Lot02PackC12Vol01-SignedContract-2013.pdf?dl=0 and https://www.dropbox.com/s/zbxd9thcbb00gln/PRP03Ph01Lot02PackC12Vol02-ConditionsofContract-2013.pdf?dl=0 and https://www.dropbox.com/s/qdhoulao8lu8ylk/PRP03Ph01Lot02PackC12Vol03-TechspecStandardspec-2013.pdf?dl=0 and https://www.dropbox.com/s/pc2blvnu9rr9tve/PRP03Ph01Lot02PackC12Vol04-Drawings-2013.pdf?dl=0 and https://www.dropbox.com/s/raipoldjln8843g/PRP03Ph01Lot02PackC12Vol05-ScopeBOQ-2013.pdf?dl=08. The commercial contract [ID# RDA/RNIP/PRP3/PHASE1/PACKAGE-1] between Sri Lanka's Road Development Authority (RDA) and China National Aero Technology Corporation Engineering (CATIC), which was signed on December 9, 2013, can be accessed in its entirety via https://www.dropbox.com/s/3wukl0dy4gvg8e2/PRP03Ph01Pack01-AcceptanceLetter-2013.pdf?dl=0 and https://www.dropbox.com/s/wpvh0v6i81b5qhj/PRP03Ph01Pack01Vol01-SignedContract-2013.pdf?dl=0 and https://www.dropbox.com/s/9tyrwgt82yfmtm8/PRP03Ph01Pack01Vol04-Drawings-2013.pdf?dl=0 and https://www.dropbox.com/s/hsc0sthx6jaxtyh/PRP03Ph01Pack01Vol02-ConditionsofContract-2013.pdf?dl=0 and https://www.dropbox.com/s/t6rawfuu8t58j76/PRP03Ph01Pack01Vol05-ScopeBOQ-2013.pdf?dl=0 and https://www.dropbox.com/s/h38d0kggcticrfn/PRP03Ph01Pack01Vol03-TechSpec-2013.pdf?dl=09. The Government of Sri Lanka loan key number is 2014001.

📚 Sources & References

China woos Lanka with $580m loan
China to lend $580 mln for Sri Lanka development projects
China Development Bank funded Priority Roads Project 3
Decisions taken by the Cabinet at its Meeting held on 2014-09-04
Ongoing Projects
Loan facility of US$ 300 million from China Development Bank Corporation to Finance the Improvement and Rehabilitation of Priority Road Project 3 (Phase I)
Public Investment supported by Export Credit
Performance Report 2014
斯里兰卡内阁批准8亿美元贷款
中国大额贷款援助斯里兰卡引发印度担忧
Mid-year fiscal position report 2013
Proposed Multitranche Financing Facility
Priority Roads Project (PRP) 3 - Phase I
Performance Report 2015
DEVELOPMENT PERFORMANCE YEAR END REVIEW 2015
Development_Performance_MidYear_2015
China Development Bank Funded Priority Road Project 3 - (Phase I) - 2015
China Development Bank Funded Priority Road Project 3 - (Phase I) - 2014
ANNUAL REPORT 2017
Rehabililitation & improvement of Priority Road Projects - 3 (Phase 1)
Priority Roads Project (PRP) 3 - Phase I
Sri Lankan President Rajapaksa inspects the head office C11 highway project
Public Investment supported by Export Credit
Government of Sri Lanka 2017 Bond Prospectus
Resource Mobilization
Performance Report 2017, 814-1 Annual 2017 for WEB New.pdf
Transactions For the period from to 2019/01/01 2019/12/31
CS-DRMS Report 814 Actual Disbursement by Transaction Date
Transactions For the period from to 2020/01/01 2020/12/31
Transactions For the period from to 2021/01/01 2021/11/30
Actual Disbursement by Transaction Date
ACCOUNTS AND OPERATIONS OF THE CENTRAL BANK OF SRI LANKA PART II
FINANCIAL STATEMENTS OF THE GOVERNMENT FOR THE YEAR ENDED 31ST DECEMBER 2018
FINANCIAL STATEMENTS OF THE GOVERNMENT FOR THE YEAR ENDED 31ST DECEMBER 2019
FINANCIAL STATEMENTS OF THE GOVERNMENT FOR THE YEAR ENDED 31ST DECEMBER 2021
Instrument-wise Details of Central Government External Debt obtained under Foreign Law as at 2022/06/30
China Development Bank Funded Priority Road Project III (Phase I) - 2020
FINANCIAL STATEMENTS OF THE GOVERNMENT FOR THE YEAR ENDED 31 ST DECEMBER 2020 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.