Completed Mixed AidData Chinese Aid

China Eximbank provides $378.5 million preferential buyer’s credit for Phase III of the Outer Circular Highway Project (Kadawatha to Kerawalapitiya Section)

$378.55M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Sri Lanka Ministry of Finance
Country	Sri Lanka
Start Date	Sep 16, 2014
End Date	Jan 30, 2029
Duration	5,250 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`39004`

Grant Description

China Eximbank provides $378.5 million preferential buyer’s credit for Phase III of the Outer Circular Highway Project (Kadawatha to Kerawalapitiya Section) On September 16, 2014, China Eximbank and the Sri Lanka Ministry of Finance signed a $494.03 million preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK No.

PBC (2014) 15 Total No.(309)] for Phase III of the Outer Circular Highway Project (Kadawatha to Kerawalapitiya Section). The face value of the PBC was subsequently downsized to $378,545,530.

📋 Loan / Grant Terms

📅 Maturity20 years

⏳ Grace Period5 years

💹 Interest Rate2%

The borrower was expected to use the proceeds of the PBC (loan) to finance approximately 95% of the cost of a commercial contract [ID# RDA/OCH/NS/II] between Sri Lanka's Road Development Authority (RDA) and Metallurgical Corporation of China Ltd (MCC) , which was signed on February 22, 2013.

China Eximbank disbursed $12,764,499.92 in 2015, $47,825,409.95 in 2016, $78,892,477.69 in 2017, $80,969,279 in 2018, $82,451,347 in 2019, and $86,161,576 in 2020. The loan had achieved a 102.7% disbursement rate ($389,064,589.56 out of $378,545,530) as of December 31, 2021. The borrower made repayments worth $25,236,368 in 2020 and $25,236,368 in 2021.

The loan's amount outstanding was $128,963,328 as of December 31, 2017, $209,932,607 as of December 31, 2018, $292,383,954 as of December 31, 2019, $353,309,162 as of December 31, 2020, $328,072,794 as of December 31, 2021, and $315,454,610 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 Eximbank loans with amounts outstanding at the time of the announcement.

The project was to construct an expressway in the outskirts of Colombo which connects with the Southern Expressway and other national roads radiating from Colombo city in order to mitigate traffic congestion in the Colombo Metropolitan Region and enhance connectivity with other regions of the country, thereby contributing to the strengthening of economic development among the regions in Sri Lanka.

The Outer Circular Highway (OCH) is located at the Colombo Metropolitan Region and passes through two administrative districts, namely Colombo and Gampaha.

The OCH Project consists of three main sections: Phase I runs from Kottawa to Kaduwela (11.0 km) (Phase I); Phase II runs from Kaduwela to Kadawatha (8.9 km); and Phase III runs from Kadawatha to Kerawalapitiya (9.32 km). Metallurgical Corporation of China Ltd (MCC) was the contractor responsible for project implementation.

Construction commenced on January 1, 2016. The originally anticipated completion date was June 30, 2019.

However, this project faced delays due to poor contractor performance, several houses refusing to vacate, and land acquisition problems at Kadawatha IC due to trade union activities in the survey department.. This project was ultimately completed on November 7, 2019.

📋 Staff Comments

This project is also known as the Outer Circular Highway Project - Phase III (Kadawatha to Kerwalapitiya). The Chinese project title is 斯里兰卡科伦坡外环高速公路.
The Government of Sri Lanka loan key number is 2014024.
One official source identifies the 2017 loan disbursement value as $68,373,418. This issue warrants further investigation.
One official source identifies the 2018 loan disbursement value as $53,219,620.
This issue warrants further investigation.
The commercial contract [ID# RDA/OCH/NS/II] between Sri Lanka's Road Development Authority (RDA) and Metallurgical Corporation of China Ltd (MCC) , which was signed on February 22, 2013, can be accessed in its entirety via https://www.dropbox.com/s/iroi9t5mhyncqcs/OuterCircularHighway-ConditionsOfContract-2013.pdf?dl=0 and https://www.dropbox.com/s/tnzjymbatyc6dtz/OuterCircularHighway-Contract-2013.pdf?dl=0

📚 Sources & References

Annual Report 2012
Outer Circular Highway
Performance Report 2014
Public Investment supported by Export Credit
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)
Progress of the Projects Implemented through the Capital Budget in the year 2016
Performance Report 2015
DEVELOPMENT PERFORMANCE YEAR END REVIEW 2015
Development_Performance_MidYear_2015
Basic Project Details
Greater Colombo Urban Transport Development Project (Outer Circular Highway Project) Phase III - 2016
Shen Heting Welcomes Officials of Sri Lanka
CS-DRMS Report 814, 20MCC Group Commences Expressway Construction in Colombo
Outer Circular Highway Project - Phase III
中国进出口银行融资支持的斯里兰卡科伦坡外环路三期项目举行通车仪式
MCC Group Sri Lanka OCH-NS II Project Opens to Traffic ahead of Time
Public Investment supported by Export Credit
Construction of Outer Circular Highway Project, 2014 - Annual Performance Report
Greater Colombo Urban Transport Development Project (Outer Circular Highway Project) Phase III - 2015
Outer Circular Highway Project - Phase III
Government of Sri Lanka 2017 Bond Prospectus
Resource Mobilization
Performance Report 2017
CS-DRMS Report 814
The Export-Import Bank of China
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
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

Sri Lanka Ministry of Finance

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