ECONOMYNEXT - A 1.85 billion dollar equivalent loan offered by Japan to build a light rail transit system in Sri Lanka's capital Colombo is back on track with easy payment terms - an annual interest of 0.1 percent, a 12-year grace period and payback over 40 years.
The finance ministry said Cabinet approval had been given for talks with Japan International Cooperation Agency (JICA) to sign an agreement for the first tranche of 260 million dollars of the loan.
The LTR project, meant to connect the centre of Colombo with suburbs, will be done by the Megapolis and Western Development Ministry.
Its minister Champika Ranawaka said last November that the loan from Japan had been derailed by a political crisis with the planned deadline for signing the loan having passed.
The crisis was triggered by President Maithripala Sirisena when he sacked Prime Minister Ranil Wickremesinghe and replaced him with former president Mahinda Rajapaksa and also dissolved parliament.
The decisions were overturned by Sri Lanka’s supreme court.
The finance ministry said in a statement the 1.85 billion dollar loan for the LRT project would be disbursed in six tranches up to 2024 with the work expected to start this year.