SRI LANKA PORT INVESTMENT

COLOMBO, June 23 (Reuters) - Sri Lanka has secured around $2.5 billion in local and foreign investment for the island nation's port expansion and related infrastructure, the head of country's ports authority said on Thursday.

It is Sri Lanka's largest investment since the end of a 25-year war and comes as the $50 billion economy emerges from the end of a 25-year war.

"We have already secured around $2.5 billion (of) investment," Sri Lanka Ports Authority Chairman Priyath Wickrama told Reuters. "This investment is bigger than the foreign direct investments to Sri Lanka. We will sign the agreements shortly."

The investment includes around $1 billion for the island's newly built port, $700 million for a port city on a reclaimed sea front, $500 million for port expansion in the commercial capital Colombo and $100 million for a cargo village, Wickrama said.

Sri Lanka has been investing heavily on long-neglected infrastructure to woo foreign direct investment, which has not picked up as expected so far despite the end of the war.

However a newly built port in the island nation's deep south city of Hambantota commissioned last year with the help of Chinese loan has attracted more investments.

"Hambantota port has attracted $952 million from 15 investors as it is expected to attract more ships compared to other regional ports," Wickrama said, adding it will have more business once commercial bunkering started shortly. "After August, the port will be fully operational."

"We have also found an investor for the port city for a volume of $700 million. We will reclaim around 500 acres of land from the seafront and lease it for 99 years. We expect global business to come and construct their headquarters there," he said without naming the investor.

The island nation is also expanding its commercial Colombo port with around $500 million deal with China Merchants Holdings and local conglomerate Aitken Spence to boost cargo-handling capacity, Wickrama said.

"We hope to increase the investment to $5 billion by (the) next five years and we hope to increase our contribution to 40 of the GDP (gross domestic product) from the current 10 percent." (Reporting by Shihar Aneez; Editing by David Holmes)