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Japan lends US$ 500mn for 2nd phase of East Container Terminal
View(s):As part of the agreement to be signed for the East Container Terminal (ECT) at the Colombo Port, Japan will lend US$ 500mn at an interest rate of 0.1% to Sri Lanka to complete the second phase of the facility, which includes an 800m berth.
The money will also go towards buying equipment to make the terminal functional. The first phase of ECT (around 400m of berth) was built with a US$ 80mn loan from the Bank of Ceylon. The Japanese loan will be repayable in 40 years with a grace period of 10 years.
Sri Lanka, Japan and India entered into the memorandum of cooperation to develop the ECT on May 28, 2019. Sri Lanka will retain 100% ownership of the terminal with operations being carried out by a joint venture company.
The Sri Lanka Ports Authority (SLPA) will hold the majority stake in this company with 51 percent. Japan and India will have a 49%. India will be a minority shareholder. The breakdown is yet to be decided.
Over 70% of the business of Colombo Port is transshipment to India.