Japan International Cooperation Agency (JICA) has agreed a $1.85 billion loan to Sri Lanka to build a Light Rail Transit (LRT) system.
The agreement was put on hold in November in response to the country's political turmoil which followed the president's sacking of the prime minister and attempt to dissolve parliament.
JICA will also provide technical assistance for the project.
The LRT, aimed at reducing congestion in Colombo, will run for 17km between Colombo Fort and Malambe.
The loan will be given at an interest of 0.1% over 40 years, with 6 installments to be made before 2024. The first repayment will be for US $260 million.
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