Sri Lanka back holding hands with China over Colombo port; seeks to convert $8 billion debt into infrastructure equity

COLOMBO: Cash-strapped Sri Lanka is seeking to convert the massive $8 billion debt it owed to China into equity for infrastructure investment, a minister said today as the Prime Ministers of two countries met in Beijing.

"There are many possibilities we are looking to swap debt to equity," Deputy Minister of State Enterprise Eran Wickramaratna said here.

His comments came as Prime Minister Ranil Wickremesinghe is visiting Beijing to renew the business relationship that had been somewhat strained by the government's decision to delay the controversial Colombo Port city project inaugurated by the Chinese president Xi Jinpeng in 2014.

China had backed the former President Mahinda Rajapaksa's bid to build the post conflict infrastructure in the country.

Chinese loans were obtained by Rajapaksa to finance his airport and sea port projects in addition to the Colombo Port City.

Wickramaratna had said that the decision to stop the Port City project was based on the environmental concerns.

During talks with his Chinese counterpart Li Keqiang in Beijing, Wickremesinghe today assured China to "speed up" the USD 1.5 billion Chinese-funded Colombo Port City project besides endorsing the ambitious Maritime Silk Road over which India has strategic concerns.

Wickremesinghe while in China is expected to negotiate to win a reprieve over the Chinese claim for compensation over the delay in the port city project, state minister of finance, Lakshman Yapa Abeyawrdena said.