Japan agrees to provide loan for Sri Lanka's light-rail line

Japan has agreed to provide a loan to build Sri Lanka's first light railway system aimed at easing traffic congestion in the capital city of Colombo, the island nation's finance ministry said Tuesday.

The loan will be granted in six stages until 2024 for the USD 1.8 billion project that will begin this year, the ministry said.

An agreement to release the first instalment of USD 260 million was signed Monday between the Japan International Cooperation Agency, which coordinates official development assistance, and Sri Lanka's finance ministry.

The proposed rail line will have 16 stations and run for 16 kilometres on elevated viaducts to minimize land acquisition.

The Japanese agency said the proposed railway system will connect Colombo's commercial hub with the administrative capital and "significantly reduce travel time in the most congested transport corridor in the country, and the only major corridor currently not supported by railway."