China has blocked a loan of over $69m, saying it will only release the funds once Sri Lanka pays fees to China’s state-run insurance company, reported The Sunday Times.
Beijing is blocking the payments, demanding that 7% of the loan should be paid to the insurer Sinosure, although Sri Lanka has offered sovereign guarantees.
The loan was offered by the state-run Industrial and Commercial Bank of China (ICBC) to fund 90% of a hydro power project in the south of Sri Lanka.
The power plant will be built by China National Electric Equipment Corporation (CNEEC), another Chinese state owned company.
Who benefits from Chinese loans to Sri Lanka? (21 Nov 2010)