Bloomberg- Sri Lanka is to take out a yuan-denominated loan equivalent to $500 million to resume a stalled highway project, according to the president’s senior economic adviser.

The construction of Sri Lanka’s Central Expressway is expected to recommence later this month, Duminda Hulangamuwa, said in a phone interview on Tuesday. The project still requires more than $500 million to complete, and the government will source the additional financing, he said.

The new yuan-denominated loan partly replaces a $989 million facility that Sri Lanka agreed to borrow from the Export-Import Bank of China in 2019 to help fund the expressway.

Funds for the latest section of the expressway running from Kadawatha to Mirigama are expected to come from China’s ExIm Bank at a “concessional rate,” Sri Lankan President Anura Kumara Dissanayake told parliament last month.

The deal is a win for Sri Lanka, which suffered a high profile default in 2022 that limited its access to international capital.

Local authorities were also in discussions with the highway contractor to pay compensation for work already carried out by the time the country defaulted on its debt, Dissanayake said, without elaborating.

About 4% of Sri Lanka’s $36.7 billion external debt was denominated in yuan at the end of last year, according to the December 2024 Debt Data Report published by Sri Lanka’s finance ministry.

China’s foreign ministry didn’t immediately reply to a request for comment.