<p>A Chinese state-owned firm said on Monday it plans to take its investment in Sri Lanka to $2 billion by building a major logistics hub.</p>.<p>Sri Lanka is looking to kickstart its economic recovery after defaulting on its foreign debt last year, when shortages of essentials such as food, fuel and medicines sparked widespread anti-government protests.</p>.<p>The investment by the China Merchants Group in a large logistics complex at Colombo Port, with an estimated construction cost of $392 million, is the first major foreign investment in Sri Lanka since the default.</p>.<p>The logistics centre project will take CMG's "accumulated investment in Sri Lanka to... over $2 billion, making it the largest foreign investment enterprise in the island", the company said in a statement on Monday.</p>.<p><strong>Read | <a href="https://www.deccanherald.com/international/world-news-politics/china-offers-sri-lanka-debt-moratorium-promises-deal-on-debt-treatment-1198229.html" target="_blank">China offers Sri Lanka debt moratorium, promises deal on debt treatment</a></strong></p>.<p>CMG will have a 70 percent stake in the company set up to build the logistics complex at Colombo, the only deep-sea port between Dubai and Singapore.</p>.<p>Describing the project as South Asia's largest logistics hub, CMG said it expects to complete it by the end of 2025.</p>.<p>CMG also manages the port complex at Hambantota on the southern tip of Sri Lanka.</p>.<p>That port was considered among the white-elephant projects launched by former president Mahinda Rajapaksa, who ruled the country for a decade until 2015.</p>.<p>Rajapaksa borrowed heavily <a href="https://www.deccanherald.com/opinion/china-s-loan-diplomacy-heads-i-win-tails-you-lose-1196817.html" target="_blank">from China</a> for projects that many criticised as a debt trap that led to the worst economic crisis in Sri Lanka's history.</p>.<p>Unable to repay a huge loan taken from China in 2017 to build Hambantota port, Sri Lanka handed it over to CMG for $1.12 billion on a 99-year lease.</p>.<p>China has loaned billions for projects in Asia, Africa and Europe under its gargantuan Belt and Road Initiative, which critics say is saddling nations with debt.</p>.<p>Neighbouring India as well as the United States have also expressed concern about China gaining a naval advantage in the Indian Ocean with its access to Sri Lanka's ports.</p>.<p>Sri Lanka has insisted that its ports will not be used for any military purposes.</p>
<p>A Chinese state-owned firm said on Monday it plans to take its investment in Sri Lanka to $2 billion by building a major logistics hub.</p>.<p>Sri Lanka is looking to kickstart its economic recovery after defaulting on its foreign debt last year, when shortages of essentials such as food, fuel and medicines sparked widespread anti-government protests.</p>.<p>The investment by the China Merchants Group in a large logistics complex at Colombo Port, with an estimated construction cost of $392 million, is the first major foreign investment in Sri Lanka since the default.</p>.<p>The logistics centre project will take CMG's "accumulated investment in Sri Lanka to... over $2 billion, making it the largest foreign investment enterprise in the island", the company said in a statement on Monday.</p>.<p><strong>Read | <a href="https://www.deccanherald.com/international/world-news-politics/china-offers-sri-lanka-debt-moratorium-promises-deal-on-debt-treatment-1198229.html" target="_blank">China offers Sri Lanka debt moratorium, promises deal on debt treatment</a></strong></p>.<p>CMG will have a 70 percent stake in the company set up to build the logistics complex at Colombo, the only deep-sea port between Dubai and Singapore.</p>.<p>Describing the project as South Asia's largest logistics hub, CMG said it expects to complete it by the end of 2025.</p>.<p>CMG also manages the port complex at Hambantota on the southern tip of Sri Lanka.</p>.<p>That port was considered among the white-elephant projects launched by former president Mahinda Rajapaksa, who ruled the country for a decade until 2015.</p>.<p>Rajapaksa borrowed heavily <a href="https://www.deccanherald.com/opinion/china-s-loan-diplomacy-heads-i-win-tails-you-lose-1196817.html" target="_blank">from China</a> for projects that many criticised as a debt trap that led to the worst economic crisis in Sri Lanka's history.</p>.<p>Unable to repay a huge loan taken from China in 2017 to build Hambantota port, Sri Lanka handed it over to CMG for $1.12 billion on a 99-year lease.</p>.<p>China has loaned billions for projects in Asia, Africa and Europe under its gargantuan Belt and Road Initiative, which critics say is saddling nations with debt.</p>.<p>Neighbouring India as well as the United States have also expressed concern about China gaining a naval advantage in the Indian Ocean with its access to Sri Lanka's ports.</p>.<p>Sri Lanka has insisted that its ports will not be used for any military purposes.</p>