Colombo (LNW): The Official Creditor Committee, co-chaired by Japan, India, and France, has officially endorsed the Agreement in Principle on specific financing terms for the restructuring of Sri Lanka’s debt, aligning with the debt restructuring parameters established in the International Monetary Fund (IMF) programme, announced the Finance State Minister Shehan Semasinghe.
Minister Semasinghe highlights that achieving consensus among all of Sri Lanka’s creditors to restructure the debt marks a crucial milestone and represents a significant stride towards resolving the economic crisis in Sri Lanka.
“We are very grateful to all bilateral creditors for their cooperation,” he stated, adding that China Exim Bank had previously agreed to restructure its debt.
“This is a very significant milestone, as, along with a similar agreement in principle provided earlier by China Exim Bank, it confirms that all of Sri Lanka’s official creditors have agreed to restructure Sri Lanka’s debt, which is a major step in the resolution of Sri Lanka’s economic crisis.”
As per the Finance Ministry, the Official Creditor Committee’s agreement encompasses approximately $5.9 billion of outstanding public debt and includes a combination of a long-term maturity extension and a reduction in interest rates.
Minister Semasinghe indicated that the Official Creditor Committee’s agreement now sets the stage for the IMF board to release the second tranche of $334 million after the completion of the first review of the International Monetary Fund’s Extended Fund Facility programme expected in December.
“This would unlock the next tranche of IMF funding, which, in turn, would enable other partners such as the World Bank and Asian Development Bank to provide further financing,” he added.
Crucially, this development serves as a noteworthy indication of the ongoing cooperation and support from the global community in Sri Lanka’s economic recovery.
The Minister affirmed Sri Lanka’s commitment to implementing a comprehensive reform program aimed at restoring macroeconomic stability and placing the country on a path of sustainable and inclusive economic growth.
He mentioned that subsequently, Sri Lanka, through its financial advisors, will continue to engage in good faith with its external private sector creditors to reach a similar agreement in principle.
