India has approved a $318 million loan for Sri Lanka railways to upgrade its communications system and rolling stock in the Tamil-dominated northern region.
Sri Lanka's spokesman and minister Gayantha Karunathilake said that the money will be used to improve the signal system from Maho to Anuradhapura in the north central province and from Anuradhapura to Omanthai in the north.
It will also be used to buy six power sets with air-conditioned carriages, 10 engines and 160 carriages, 30 wagons with oil tanks and 20 container carrying wagons.
The cabinet had approved a proposal by Sri Lankan Prime Minister Ranil Wickremesinghe to enter into an agreement with Exim Bank of India for the loan.
India has already given loans of about $996 million to develop Sri Lanka's railway service which were used to improve northern and southern railway lines and buy engines and power sets.