Sri Lanka to raise $2.5 billion through foreign loans

Sri Lanka's central bank Wednesday announced plans to raise $2.5 billion in foreign loans, a month after Finance Minister Ravi Karunanayake said the country was struggling under a "gigantic debt trap". The nation is struggling to repay billions of dollars borrowed by its previous government for white-elephant projects.
Central bank Governor Indrajith Coomaraswamy told reporters the country will issue $1.5 billion in sovereign bonds and raise another $1 billion through a syndicated loan.
"In the coming months the government intends to raise a syndicated loan and there is a cabinet paper (seeking formal approval) to issue the international sovereign bonds," he said.
The money raised is expected to repay part of the existing debt and build reserves, finance ministry officials told AFP.
The previous government took Chinese loans to build a deep-sea port at Hambantota in the south of the country - at a cost of $1.4 billion - and an international airport in the same area. However, only one airline operates to the airport while only a handful of ships call at the port every month.
The government is now looking to lease out the port and the airport and is also seeking a partner for cash-strapped national carrier Sri Lankan to reduce foreign debt servicing costs.