Completed Development AidData Chinese Aid

CDB provides $100 million loan for Rehabilitation and Improvement of Priority Road Project 3 - Phase II (PRP3-II) (Linked to Record ID#46971, #39001 and #33402)

$100M USD

Funder	China Development Bank (CDB)
Recipient Organization	Government of Sri Lanka
Country	Sri Lanka
Start Date	Nov 24, 2014
End Date	Oct 21, 2028
Duration	5,080 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`39002`

Grant Description

CDB provides $100 million loan for Rehabilitation and Improvement of Priority Road Project 3 - Phase II (PRP3-II) On November 24, 2014, China Development Bank (CDB) and the Government of Sri Lanka signed a $100 million loan facility agreement [No. 4510201401100000587] for the Rehabilitation and Improvement of Priority Road Project 3 - Phase II (PRP3-II).

📋 Loan / Grant Terms

💰 Loan Amountcarried the following terms: a 15 year maturity

📅 Maturity15 years

⏳ Grace Period3 years

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

CDB disbursed $14,855,169.17 in 2016, $32,189,979 in 2017, $3,783,783.61 in 2018, $20,241,605.52 in 2019, $6,457,228 in 2020, and $13,834,687 in 2021. The loan had achieved a 91.3% disbursement rate ($91,362,452.30 out of $100 million) as of December 31, 2021. The borrower made repayments worth $7,700,000 in 2018, $7,700,000 in 2019, $7,700,000 in 2020 and $7,700,000 in 2021.

The loan's amount outstanding was $43,195,149 as of December 31, 2017, $54,290,893 as of December 31, 2018, $60,375,271 as of December 31, 2019, $59,132,499 as of December 31, 2020, $65,267,186 as of December 31, 2021, and $61,417,186 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 objective of the project is to improve and rehabilitate priority road sections in Sabaragamuwa and Central Province, as well as to ensure the connectivity among already improved road sections. The following 20 roads are being rehabilitated under the Priority Road Project 3 - Phase II: 1. Katugastota-Medawala Road: 10 km (Kandy District) 2.

From Thibbutta Junction to Demaralaawa-Penanetipola-Battagalla Road: 5 km (Kandy District) 3. Hapugahayatatenna-Watadeniya Road: 8 km (Kandy District) 4. Naranwita-Udadeniya-Wewatenna-Niyangama Road: 5 km (Kandy District) 5. Heennarandeniya Junction-Udiwita Elpitiya Road and Elipitiya River-Weligalla Junction: 5 km (Kandy District) 6.

From Nilamba Gurukale Junction to Godawala (Doluwa Road) Starting from Kandy Galaha Main Road: 6 km (Kandy District) 7. Kotaligoda-Thismada Road: 5 km (Kandy District) 8. Eramuduliyadda-Kolugala-Thismada Road: 5 km (Kandy District) 9. Nawalapitiya-Nagaswella Road: 11 km (Kandy District) 10. From Wahugapitiya-Nuwara Eliya Road to Doragala Via Chappiliyawatta: 2 km (Kandy District) 11.

Yatirawana-Balapola Road: 2 km (Kandy District) 12. A.C.S Hameed Mawatha: 0.9 km (Kandy District) 13. Mahanuwara Aruppola Mawatha No.5 (From Bakery Junction to Aruppola Junction): 0.5 km (Kandy District) 14. Rambukkana-Mawanella Road: 11.79 km (Kegalle District) 15. Bulugolla-Dombemada-Wahauwa Road: 7.65 km (Kegalle District) 16.

Mawanella-Aranayaka-Horewela Road: 14.43 km (Kegalle District) 17. Gevilipitiya-Hettimulla Road: 14 km (Kegalle District) 18. Kegalle-Bulathkohupitiya-Karawanella Road: 10.35 km (Kegalle District) 19. Kegalle-Siyabalapitiya-Dewalagema Road: 2.63 km (Kegalle District) 20. Mabopitiya-Degalathiriya Road: 1.75 km (Kegalle District).

The project commenced in March 2016 according to the Sri Lanka Ministry of Highways and Investment and was expected to be completed in June 2018. However, as of September 30, 2019, PRP3-II was still ongoing. In December 2020, CDB reportedly stopped providing funding for an unknown reason. The final disbursement period ended on December 31, 2020.

The construction was stopped at this time, causing inconveniences to road users.

📋 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#39001 (PRP2), and Project ID#33402 (PRP3-Phase 1) for more details.
The Government of Sri Lanka loan key number is 2014034.

📚 Sources & References

Recommendation of the Fiscal Commission Council for the Financial Year 2015
Decisions taken by the Cabinet at its Meeting held on 2014-09-04
Performance Report 2014
Progress of development projects and programmes being implemented in 2017 ( as at 31st December 2017)
Progress as per the end of 3rd Quarter 2017 Department of Project Management and Monitoring
Performance of Priority Projects (As at 31st December - 2017)
Progress of development projects and programmes being implemented in 2017 (As at 30th September 2017)
Performance Report 2015
DEVELOPMENT PERFORMANCE YEAR END REVIEW 2015
Development_Performance_MidYear_2015
Ongoing Projects
China Development Bank Funded Priority Road Project 3 - (Phase II) 2015
CS-DRMS Report 814
Rehabililitation & improvement of Priority Road Projects - 3 (Phase 2)
Public Investment supported by Export Credit
Government of Sri Lanka 2017 Bond Prospectus
Resource Mobilization
Performance Report 2017
ACCOUNTS AND OPERATIONS OF THE CENTRAL BANK OF SRI LANKA PART II
Disbursements in 2014 January to December.pdf, 814 Disbursements Jan to Dec 2015
Disbursement from January to December 2016.pdf, 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
China Development Bank Funded Priority Road Project 3 - (Phase II) - 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.

All Grantees

Government of Sri Lanka

Interested in applying for this grant?

Complete our application form to express your interest and we'll guide you through the process.

Apply for This Grant