Completed Development AidData Chinese Aid

CDB provides $152.8 million loan for Rehabilitation and Improvement of Priority Road Project 1 (PRP1) (Linked to Record ID#39001, #33402 and #39002)

$152.48M USD

Funder	China Development Bank (CDB)
Recipient Organization	Government of Sri Lanka
Country	Sri Lanka
Start Date	Dec 16, 2010
End Date	Feb 15, 2026
Duration	5,540 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`46971`

Grant Description

CDB provides $152.8 million loan for Rehabilitation and Improvement of Priority Road Project 1 (PRP1) On December 16, 2010, China Development Bank and the Government of Sri Lanka signed a $152,479,685 loan agreement (No. 4500402212010110492) for the Priority Road Project-1 (PRP1).

📋 Loan / Grant Terms

💰 Loan Amountcarries the following terms: a 15 year maturity

📅 Maturity15 years

⏳ Grace Period3 years

The borrower was expected to use the proceeds of the loan to partially finance a commercial contract [ID# RDA/RNIP/PRP1/PACKAGE - A (C1A, C2A, C3, C6A, C8)] between Sri Lanka's Road Development Authority (RDA) and China National Aero Technology International Engineering Corporation (CATIC), which was signed on December 21, 2010.

CDB disbursed $123,291,010.26 in 2012, $24,315,344.88 in 2013, $22,544,790.73 in 2014, and $7,560,640.44 in 2015. The loan had achieved a 116.3% disbursement rate ($177,711,786.31 out of $152,800,000) as of December 31, 2015.

The borrower made repayments worth $11,750,000 in 2018, $11,750,000 in 2019, $11,429,685 in 2020 and $11,750,000 in 2021.

The loan's amount outstanding was $93,715,455 as of December 31, 2017, $81,965,455 as of December 31, 2018, $70,215,455 as of December 31, 2019, $58,785,770 as of December 31, 2020, $47,035,770 as of December 31, 2021, and $47,035,770 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 purpose of the project was to provide an efficient national road network that would lower transportation costs and improve the integration of the country.

The project sought to construct or rehabilitate 9 different road segments: (1) the 7.47 km Beliatta Tangalle Road on the C1A; (2) the Bopale - Kiribbanara - Uadamauara Road on the C12A; (3) the Flyover at Siribopura Junction on the C1A; (4) the 47 km Pelawatta Kankotiyawatta Thiniyawala Morawaka Road on the C2A; (5) the 0 - 033.45 km Thiruwanaketiya Agalawatta Road on the C3; (6) the 20.5 km Kandy - Mahiyangana- Padiyathalawa Road on the C6A; (7) the 5.63 km Kalkudah Road on the C8; (8) the 4.42km Kalkudah Valachchenai Road on the C8; and (9) the 52 km Paranthan Mullaitivu Road on the C11.

China National Aero Technology International Engineering Corporation (CATIC-ENG) is the contractor responsible for project implementation.Its work was overseen by the Government of Sri Lanka’s Road Development Authority. Project implementation began on December 29, 2010 and was originally scheduled for completion by December 29, 2014.

However, the project did not reach completion until December 31, 2015.

📋 Staff Comments

The Priority Road Project had three phases; see Project ID#39001 (PRP2), Project ID#33402 (PRP3-Phase 1), and Project ID#39002 (PRP3-Phase 2) for more details.
The Government of Sri Lanka loan key number is 2010051.
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/PRP1/PACKAGE - A (C1A, C2A, C3, C6A, C8)] between Sri Lanka's Road Development Authority (RDA) and China National Aero Technology International Engineering Corporation (CATIC), which was signed on December 21, 2010, can be accessed in its entirety via https://www.dropbox.com/s/4xyafksjentldyc/PRP01-AcceptanceLetter-2010.pdf?dl=0 and https://www.dropbox.com/s/u36fvvybszmncbg/PRP01Vol01-SignedContract-2010.pdf?dl=0 and https://www.dropbox.com/s/3yx0ysiv18xrtj1/PRP01Vol02-ConditionsofContract-2010%20%281%29.pdf?dl=0 and https://www.dropbox.com/s/etggy624xqnm8gy/PRP01Vol03-StandardSpec-2010.pdf?dl=0 and https://www.dropbox.com/s/mk29w5k8b2oe3eh/PRP01Vol04-Drawings-2010.pdf?dl=0 and https://www.dropbox.com/s/efqmu95iibwqok2/PRP01Vol05-BOQ-2010.pdf?dl=0

📚 Sources & References

Northern Road Connectivity Project - Additional Financing (RRP SRI 42254)
Ongoing Projects
Public Investment supported by Export Credit
Feature: China's Belt and Road Initiative boosts poverty relief in Sri Lanka
Rehabililitation & improvement of Priority Road Projects - 1
P.S.No. 2014/326 Fourth Instalment – Part VI Foreign Funded Projects - Report of the Auditor General 2012
MID – YEAR FISCAL POSITION REPORT 2013
ACCOUNTS AND OPERATIONS OF THE CENTRAL BANK OF SRI LANKA
Public Investment supported by Export Credit
Priority Roads Project funded by the China Development Bank Company Ltd
Government of Sri Lanka 2017 Bond Prospectus
Resource Mobilization
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
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
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

Government of Sri Lanka

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