The governor of Sri Lanka's Central Bank, Arjuna Mahendran, is seeking concessional overseas loans to refinance some of the expensive debt the country has received and to reduce its reliance on global bond markets.

“We are looking at tens of billions of dollars” from lenders including the U.S., Japan and the European Union, Mr Mahendran said in a telephone interview with Bloomberg.

Concessional credit will “eventually refinance most of the commercial lending the country has contracted in the last five to seven years.”

“We are looking at hundreds of basis points of savings, which will be announced over the course of the coming year. Our debt-service profile on external debt will become much more benign within a year," Mr Mahendran further said.

The controversial Port City project will commence construction soon, Ports and Shipping Minister Arjuna Ranatunga said on Friday.

The Chinese-funded development was initially put on hold over the legality of the project initiated by the previous government. President Sirisena on taking the presidency said the project needed to be reviewed.

Mr Ranatunga said issues delaying the construction would be resolved soon.

The project was reviewed by the new government along with several others initiated by former president Mahinda Rajapaksa. Right after the election, the government announced it would cancel the project.

The Bodu Bala Sena on Saturday confirmed it would take part in the general election, due to be held on August 17.

General Secretary Galagodaaththe Gnanasara said to Ceylon Today that a new political party had been created and registered to contest the elections.

"We will give all the information in due course. At the moment, all I can say is that we will contest the general election on 17 August under a new party name and a symbol," the Thera said adding "all the information, including the name of the party and the symbol will be revealed at the end of this month," the monk said.

The Tamil National Alliance has accused the Sri Lankan government of attempting to cover up increasing evidence linking abductions with former defence secretary Gotabhaya Rajapaska and the Sri Lankan Navy.

Speaking to journalists in Jaffna, TNA spokesperson and MP, Suresh Premachandran said that an international inquiry would be the sole means by which to discover the truth behind abductions and disappearances in Sri Lanka.

Mr Premachandran said the current government were attempting to cover-up concrete evidence linking the navy and Gotabhaya with abductions, including reports of over 700 imprisoned in a camp known as 'Gota camp' in Trincomalee's naval base.

The government, Mr Premachandran said, addressed the issue long enough only to deny that any such camps presently existed.

A Facebook page started to “save war hero Sunil Rathnayaka”, the Sinhala soldier sentenced to death over the massacre of 8 Tamil civilians, has garnered over 13,000 likes, within a day of being set up.

The Deputy Spokesman for the Secretary-General of the UN, Farhan Haq, reiterated that Sri Lanka needs to consult broadly, most importantly with victims and their families, in establishing political processes and stressed the need for credible mechanisms for accountability and reconciliation.

UPDATED: 2355 GMT

President Maithripala Sirisena has dissolved Sri Lanka’s parliament, paving the way for parliamentary elections.

"The president signed a gazette notification dissolving parliament with effect from midnight today," government spokesman Rajitha Senaratne said.

The government announced that the election will be held on 17 August.

Nominations will be called from 6-15 July and the new parliament is due to sit by September 1.

Deputy Minister for Foreign Affairs Ajith Perera said on Friday morning that the move had been imminent and was prompted by stalling on proposed electoral reforms.

See full text of the gazette below.

The conviction and death sentence given to a Sinhala soldier showed that Sri Lanka has an independent and exceptional judicial system, army spokesperson Jayanath Jayaweera said on Friday, the Daily Mirror reported.

Speaking to reporters at the Information Department, he said the government would not hesitate to convict armed forces personnel who committed acts of crime, violence or corruption.

Sri Lankan opposition parliamentarian Wimal Weerawansa warned that “national security” was at risk in Sri Lanka and rallied against the dismantling of High Security Zones (HSZ) in the island’s North-East.

Colombo Gazette reports the United People’s Freedom Alliance (UPFA) MP as saying urgent action was needed to prevent the island being divided and stated the government was releasing land in the North-East due to international pressure.

He went on to warn of attempts to dismantle HSZs, highlighting the Palali HSZ as an example.

His remarks come as opposition politicians, including the former foreign minister, warned that the government was facing threats to “national security”.