Lanka Sites

COLOMBO, Nov 19 (Reuters) - Sri Lanka has approved $891 million loan from China's Export-Import bank to fund a coal power plant, an official said on Thursday, as the island nation focuses on infrastructure after the end of 25 years of war.

China along with India are now increasingly competing to win lucrative and strategic investments in Sri Lanka since the fighting stopped in May.

Both India and China provided military assistance, including ammunition in the final phase of the war, while they also helped President Mahinda Rajapaksa's government to face Western-led criticism of rights abuses.

Anura Priyadharshana Yapa, the cabinet spokesman said the government approved China's offer of the 20-year loan with a 2 percent interest rate and five-year grace period to build the second phases coal-fired power plant in northwestern province.

Sri Lanka and China signed an over $350 million worth deals to build a highway and an oil bunkering facility in August .

(Reporting by Ranga Sirilal; Writing by Shihar Aneez)