China Merchants Port Holdings Company (CMPort) has finalised the terms of a new concession agreement with Sri Lanka Ports Authority (SLPA) and the Government Sri Lanka (GOSL) for the development, management and operation of the Hambantota Port in Sri Lanka.

Hambantota International Port Group (HIPG) and Hambantota International Port Services Company (HIPS) are also involved in the deal.

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The 99-year concession arrangement will see SLPA and GOSL grant the sole and exclusive right to develop, operate and manage the Hambantota Port to HIPG, while HIPS will obtain the sole and exclusive right to develop, operate and manage the port’s common user facilities.

No fresh tenders or rights will be awarded to any third party regarding the development of the port during the initial 15 years of the concession agreement.

“The 99-year concession arrangement will see SLPA and GOSL grant the sole and exclusive right to develop, operate and manage the Hambantota Port to HIPG.”

In addition, CMPort has agreed to invest up to $1.12bn for the development of marine-related activities at Hambantota Port.

The total allocated sum includes $973.6m to be paid to Sri Lanka Ports Authority (SLPA) for the acquisition of 85% issued share capital of HIPG, which in turn will use a portion of the amount to acquire 58% issued share capital of HIPS.

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The remaining $146.3m will be deposited into a bank account in the name of the CMPort in Sri Lanka, and will be used to develop Hambantota Port and its marine-related activities once the company is able to reach an agreement with the Sri Lankan Government.

Hambantota Port is located on the southern coast of Sri Lanka and is currently in its third phase of development.

The first phase of the port’s development was completed in December 2011, and operations began in the following year.

Construction works for the second phase were completed in April 2015.