By: Isuru Parakrama
November 01, Colombo (LNW): Treasury Secretary Mahinda Siriwardena has voiced confidence that the nation’s debt restructuring process is approaching completion, signalling a potential turning point towards financial stability and renewed investment.
This move is essential for Sri Lanka as it works to bolster its economy and unlock fresh sources of funding.
Speaking on Wednesday (30), Siriwardena underscored the role of international partnerships, particularly with China, in assisting Sri Lanka through its financial struggles.
“China’s provision of loans and financial aid has been critical during our most challenging periods,” he stated, adding that China’s continued support will be key to Sri Lanka’s plans for economic recovery and development.
China’s involvement has been central to Sri Lanka’s debt restructuring journey, which began after the severe economic crisis in mid-2021. Notably, in October 2023, China became the first official creditor to reach a preliminary agreement on debt restructuring terms with Sri Lanka, primarily through the Export-Import Bank of China (Exim Bank).
This progress culminated in a formal debt treatment agreement in June 2024, in tandem with a Memorandum of Understanding signed with the Official Creditor Committee (OCC) – a consortium of 17 official lenders co-chaired by France, India, and Japan.
Following these agreements, the Exim Bank of China was the first foreign lender to finalise its debt treatment process, while the China Development Bank (CDB) has also made significant progress, with only a few remaining comparability aspects to be addressed.
Siriwardena acknowledged the complexities and technical hurdles of the debt restructuring process, particularly the need to align agreements with the International Monetary Fund’s Debt Sustainability Analysis and to meet requirements for comparability across creditors.
He credited the progress made to the collaborative efforts and trust demonstrated by both Sri Lanka and its international partners.
As the debt restructuring chapter nears a close, Siriwardena expressed optimism about securing fresh investments, focusing on high-quality projects that will drive Sri Lanka’s growth agenda.
