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Japan to resume stalled projects in Sri Lanka following bilateral agreement

May 05, Colombo (LNW): Japanese Foreign Minister Yoko Kamalkawa announced that Japan will recommence yen loan projects in Sri Lanka after the island nation formalises a deal with its bilateral lenders.

Minister Kamalkawa made these remarks after meeting with her Sri Lankan counterpart Ali Sabry in Colombo.

“Stability and economic development in Sri Lanka, strategically located in the Indian Ocean, are crucial for the stability and prosperity of the entire Indo-Pacific region,” stressed Minister Kamalkawa during a briefing in Colombo.

She further expressed Japan’s expectation for the prompt signing of Memorandums of Understanding (MOUs) between the Officials Creditor Committee (OCC) and Sri Lanka, highlighting Japan’s co-chairmanship of the OCC.

“We stress the importance of reaching a debt restructuring agreement with all creditors transparently and comparably,” she added.

Minister Kamalkawa also conveyed Japan’s intention to resume existing yen loan projects swiftly following the signing of the MOU on debt restructuring and confirmation of the Sri Lankan government’s intent to conclude a bilateral agreement.

Diplomatic relations between Japan and Sri Lanka faced challenges after former President Gotabaya Rajapaksa unilaterally cancelled a $1.5 billion railway project.

President Ranil Wickremesinghe apologised to the Japanese government for this cancellation during his visit to Japan in May last year.

While Minister Kamalkawa did not specify if the cancelled Light Rail Transit (LRT) project would be among those resumed post-MOU signing, she underscored the importance of various reforms undertaken by Sri Lanka for the re-normalisation of its economy.

Furthermore, Japan, advocating for a “Free and Open Indo-Pacific,” plans to bolster maritime cooperation with Sri Lanka.

As part of this initiative, Japan will provide Sri Lanka with a vessel equipped with sonar technology for data compilation and charting, upon Sri Lanka’s request.

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