Updated on Tuesday, June 30, 2009, 18:26 IST

Colombo, June 30: Sri lanka on Tuesday set up a special investment zone for Chinese companies as part of efforts to raise billion of dollars in FDI to boost its economy ravaged by decades of ethnic conflict.

"This is the first time the government has given a foreign country a specific area to develop and attract foreign investments into the country," Investment Promotions Minister, Anura Priyadharshana Yapa said.

Huichen Investment Holdings Limited of China was given the Mirigama zone, some 55 kilometers northeast of Colombo for a period of 33-years to allow companies from the country to operate in the zone.

Huichen is expected to spend USD 28 million to develop infrastructure in the zone in the next three years, Yapa said.

Huichen's president, Huang Yu Ping, said more than two dozen Chinese firms showed interest in setting up operations at the Mirigama zone.

Following the ending of the three-decades of ethnic bloodshed, the Sri Lankan government hopes to attract one billion dollars in direct foreign investment this year, up from USD 800 million last year.

Bureau Report