By Uditha Jayasinghe

COLOMBO (Reuters) -Sri Lanka resumed construction of a stalled highway project with a new $500 million Chinese loan on Wednesday, the first funding from its largest bilateral creditor since the island nation defaulted on its foreign debt three years ago.

The construction of the 38-km (24-mile) highway stretch of the Central Expressway that links the hub of Colombo with Kandy city in the central highlands was launched in 2016 but suspended in 2023 when the project ran out of funds and building materials in the aftermath of the country’s worst financial crisis.

The highway aims to provide faster connectivity between two major cities in the South Asian nation and support economic activity. About one-third of it had been built before work came to a halt.

The Sri Lankan

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