The agency said it will fund building a new passenger terminal at the Bandaranaike International Airport which suffers congestion from growing tourism.

Vice President of JICA Hidetoshi Irigaki and the Chairman of the Airports and Aviation Service Company S. Saman Ediriweera in the presence of Minister of Transport Nimal Siripala de Silva signed the agreement to provide a Rs. 49 billion line of credit for the project which is estimated to cost Rs. 82 billion.

The new passenger terminal building is planned to be opened in 2020 and will enable handling of 15 million passengers a year, more than doubling the present capacity and ease the congestion.

The new terminal would use solar energy and recycled water from a sewage plant for the flushing of toilets. It will be built according to modern and international as well as civil aviation services standards.

"The project would be developed based on the concept of (an) eco-airport with Japanese advanced technology and know-how," JICA said.

According to the agreement with Sri Lankan government concluded last week, the loan, with 0.1 percent annual interest, is repayable over 40 years.

The Bandaranaike International Airport handled 8.5 million passengers in 2015 and exceeded its capacity of 6 million passengers per annum while tourist arrivals to country steadily increased since the end of the war in 2009, reaching nearly 1.8 million in 2015.