China Merchants Port Holdings Company (CMPort) has formally taken over the operations of Hambantota Port in Sri Lanka under a 99-year lease agreement.

CMPort has provided $292m of a total $1.12bn to the joint venture (JV) created by the company and Sri Lanka Ports Authority (SLPA) for the port’s operation as part of the development.

Hambantota Port is located close to the main shipping route from Asia to Europe and is expected to play a key role in China’s ongoing ‘Belt and Road Initiative’.

“Hambantota Port is located close to the main shipping route from Asia to Europe and is expected to play a key role in China’s ongoing ‘Belt and Road Initiative’.”

The port was constructed via an investment of roughly $1.5bn and originally opened in 2010.

Sri Lanka Finance Minister Mangala Samaraweera was quoted by Reuters as saying: “Today we received $292m as the first tranche of the Hambantota Port joint venture.

“This is but the first step in realising the true commercial value of the port after seven long years.”

Additionally, Sri Lanka expects to receive a further 10%, or nearly $100m, within a month and another $585m over the next six months from CMPort.

CMPort, SLPA and the Government of Sri Lanka (GOSL) previously finalised the terms of a new concession agreement for the development, management and operation of Hambantota Port in July.

Two new companies known as Hambantota International Port Group (HIPG) and Hambantota International Port Services (HIPS) were to support the ownership of the port.

The original concession agreement was also revised to reduce CMPort’s stake in the Hambantota port JV from 85% to 70%.