China to give $989 million to build new highway in Sri Lanka

China has agreed to provide a loan of $989 million to Sri Lanka to build an expressway that will connect the island nation's tea-growing central region to a China-run seaport on the southern coast.

A finance ministry statement said Friday that the Export-Import Bank of China has agreed to provide a concessional loan covering 85 percent of the contract prices for the expressway, whose total estimated cost is $1.16 billion.

The loan comes as Sri Lanka struggles to repay $5.9 billion in foreign loans this year, of which 40 percent must be serviced by the end of this month.

Much of Sri Lanka's foreign debt is from China.