Completed Development AidData Chinese Aid

CDB provides $500 million loan for Rehabilitation and Improvement of Priority Road Project 2 (PRP2) (Linked to Record ID#46971, #33402 and #39002)

$35.7K USD

Funder	China Development Bank (CDB)
Recipient Organization	Government of Sri Lanka
Country	Sri Lanka
Start Date	Mar 31, 2011
End Date	Mar 18, 2033
Duration	8,023 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`39001`

Grant Description

CDB provides $500 million loan for Rehabilitation and Improvement of Priority Road Project 2 (PRP2) On March 31, 2011, China Development Bank and the Government of Sri Lanka signed a $500 million loan facility agreement (No. 4500062212011110472) for the Rehabilitation and Improvement of Priority Road Project 2 (PRP2).

📋 Loan / Grant Terms

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

📅 Maturity15 years

⏳ Grace Period4 years

The loan was reportedly collateralized against cash deposits in escrow account.

The first tranche (worth $326 million) was received by the Central Bank of Sri Lanka on June 29, 2011 and second tranche (worth $174 million) was on October 28, 2011. $157 million was disbursed in 2011 and 2012, $118.52 million was disbursed in 2013, $161.01 was disbursed in 2014, $51.37 was disbursed in 2016, and $7.38 million was disbursed in 2016.

The loan had achieved an 99.5% disbursement rate ($497.56 million out of $500 million) as of December 31, 2016. $2,435,206.99 was disbursed in 2017, bringing the loan disbursement rate to 99.99% ($499,995,206.99).

The borrower made repayments worth $38,460,000 in 2018, $38,460,000 in 2019, $38,460,000 in 2020 and $38,460,000 in 2021.

The loan's amount outstanding was $346,160,000 as of December 31, 2017, $307,700,000 as of December 31, 2018, $269,240,000 as of December 31, 2019, $230,780,000 as of December 31, 2020, $192,320,000 as of December 31, 2021, and $173,090,000 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.

The total cost of the PRP2 was $556 million. 90% of the project cost was covered by CDB and approximately 10% of the project cost was provided by the Government of Sri Lanka.

The purpose of the project to rehabilitate and improve 581 km in 20 roads, including 95 km of provincial roads in Nuwara Eliya district, construction of two flyovers and reconstruction and widening of 22 bridges under two components. The 24 project components listed below include the 20 road sections, the 2 flyovers, and the 2 bridge components.

This project included 24 components: 1. Horawela-Pelawatte-Pitigala Road: 0.0 - 17.50 km 2. Horana-Anguruwatota-Aluthgama Road: 5.0 - 32.0 km (total length of 27.0 km) 3. Horawela-Pelawatta-Pitigala Road: 17.5 - 25.74 km (total length of 8.24 km) 4. Construction of a flyover at Mattala airport access road junction in Hambantota Hub Development. 5.

Construction of a flyover at 100 feet road and bypass road junction in Hambantota Hub Development. 6. Reconstruction/widening of Bridges on Tiruwanaketiya-Agalawatta Road: 33.45 - 67.80 km (total length of 34.35 km) 7. Reconstruction/widening of Bridges on Horana-Anguruwayoya-Aluthgama Road: 5.0 - 32.0 km (total length of 27.0 km) 8.

Thihagoda-Kamburupitiya-Mawarala-Kotapola Road: 23.0 - 67.0 km (total length of 44.0 km) 9. Hungama-Middeniya Road: 0.0 - 30.0 km 10.

Nagoda-Kalawellawa-Bellapitiya Road: 27.0 - 57.0 km (total length of 30.0 km) This project included the following components in the Northern Zone: 11. Kandy-Mahiyangana-Padiyathalawa Road: 93.15 - 102.28 km (total length of 9.13 km) 12. Badulla-Karamatiya-Andaulpotha Road: 0.0 - 48 km 13. Mahiyangana-Dimbulagala-Daukkane Road: 0.0 - 24.10 km 14.

Bibile-Uraniya-Mahiyangana Road: 22.0 - 39.58 km (total length of 17.58 km) 15. Galkulama-Anuradhapura Road: 0.0 - 15.0 km & 16.0 - 16.64 km (total length of 15.64 km) 16. Kadahapoka-Rambawewa Road: 0.0 - 18.71 km 17. Kurunegala-Narammala-Madampe Road: 0.0 - 22.36 km 18. Galagedara-Rambukkana Road: 0.0 - 18.5 km 19.

Tennekumbura-Rikillagaskada-Ragala Road: 20.2 - 73.64 km (total length of 53.44 km) 20. Uswetakeiyawa-Epamulla-Pamunugama Road: 0.0 - 8.05 km 21. Palaviya-Kalpitiya Road: 14.0 - 40.60 km (total length of 26.60 km) 22. Mahiyangana-Dimbulagala-Dalukkane Road: 24.10 - 72.8 km (total length of 48.7 km) 23.

Manampitiya-Aralaganwila-Maduru Oya Road: 0.0 - 3.0 km 24. Provincial Roads in Nuwaraeliya District: 85.01 km. Xi'an Dagang Road Machinery Co.

Ltd., China National Aero Technology International Engineering Corporation, and Hunan Construction Engineering Corporation were the three contractors responsible for project implementation. Implementation PRP2 began on June 28, 2011 and it was completed on December 31, 2014.

📋 Staff Comments

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 Priority Road Project had three phases; see Project ID#46971 (PRP1), Project ID#33402 (PRP3-Phase 1), and Project ID#39002 (PRP3-Phase 2) for more details.
For the time being, AidData has not populated the insurance fee field. Most Sinosure insurance fees vary between 5-7%. However, the Government of Sri Lanka identifies a 3.26% fee under an 'other payments' column in Annex II of the ERD's 'Global Partnership Towards Development 2013' publication (see https://www.erd.gov.lk/images/pdf/global_partnership_towards_development_2013.pdf). This issue warrants further investigation.
The Government of Sri Lanka loan key number is 2011007.

📚 Sources & References

Public Investment supported by Export Credit
Disbursements of Foreign Funded Loan/Grant 2014 (Actual Disbursements by Transaction Date) 2014
Priority Roads Project 2 (PRP2)
Performance Report 2011
斯总统拉贾帕克萨出席Palavi-kalpitiya部分路段道路优先改造工程竣工仪式 [President of Sri Lanka attends ceremony for the construction of the Palavi-kalpitiya Highway]
Annual Performance Report 2012
Annual Report of Road Development Authority (RDA) for the year 2011
P.S.No. 2014/326 Fourth Instalment – Part VI Foreign Funded Projects - Report of the Auditor General 2012 1 ROAD NETWORK IMPROVEMENT PRIORITY ROAD PROJECT 2 - 2012
China provides $760 million loan to Sri Lanka for Road Development
China in India’s backyard
Mid-year fiscal position report 2013
DEVELOPMENT PERFORMANCE YEAR END REVIEW 2015
Development_Performance_MidYear_2015
汉班托塔地区立交桥项目顺利通车
Dagang's Road to Sri Lanka
Rehabililitation & improvement of Priority Road Projects - 2
CS-DRMS Report 814
Road Network Improvement Priority Road Project-2 -2013
ACCOUNTS AND OPERATIONS OF THE CENTRAL BANK OF SRI LANKA
Public Investment supported by Export Credit
Government of Sri Lanka 2017 Bond Prospectus
Resource Mobilization
ACCOUNTS AND OPERATIONS OF THE CENTRAL BANK OF SRI LANKA PART II, 814-1 Annual 2017 for WEB New.pdf
Transactions For the period from to 2019/01/01 2019/12/31, 814 up to Oct 2018.PDF
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
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
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.