Sri Lanka has resumed construction on the stalled Central Expressway with the help of a fresh $500 million loan from China, marking the first major tranche of funding from its largest bilateral creditor since Colombo defaulted on foreign debt three years ago.
The project, which aims to link Colombo with Kandy, had been suspended in 2023 when funds and building materials ran out amid the island’s worst economic crisis. Though originally launched in 2016, only one-third of the 38-km stretch had been completed before work ground to a halt.
At a ceremony to restart construction on Wednesday, Sri Lanka’s president Anura Kumara Dissanayake declared that the highway would now be finished by April 2028. The project is being carried out by China Metallurgical Group Corporation and financed by China EXIM Bank.
“Typically, when a country goes through a financial crisis, experts say that the country loses a decade of development. But I’m confident that we can reduce this time by half,” Dissanayake told the gathering, adding that Sri Lanka would post growth “close to 5% this year” and that his government’s 2026 budget would aim at “ending the crisis.”
The loan comes just months after Colombo concluded a $10 billion restructuring of its bilateral debt with Japan, India and China. According to Sri Lanka’s finance ministry, the island still owes Beijing $4.9 billion, most of it borrowed for large-scale infrastructure projects that critics have described as debt traps.
Chinese ambassador Qi Zhenhong hailed the resumption of work as a “major turning point” and a “symbol of partnership” between the two countries, praising Colombo for “overcoming numerous difficulties” to restart the highway.
