As Sri Lanka continues to grapple with its worst economic crisis in decades, the country has taken another step forward in managing its crippling debt burden. In a significant development, Sri Lanka signed a bilateral agreement with Hungarian Export Credit Insurance PLC to reschedule loans worth around €30 million (approximately Rs. 10.5 billion), as part of its broader external debt restructuring programme.
This move comes at a critical time when Sri Lanka is striving to rebuild its economy while juggling foreign debt obligations that have ballooned over the years. Hungary, though a relatively small creditor in the global landscape, has played a supportive role in recent years by funding several infrastructure and technology-linked projects in Sri Lanka. These include investments in water treatment, education technology, and urban development, further solidifying diplomatic and economic ties between the two nations.
The Finance Ministry described the agreement as further evidence of the Government’s commitment to concluding the debt restructuring process swiftly to ensure long-term debt sustainability and support national economic recovery. The agreement with Hungary follows the signing of a landmark Memorandum of Understanding (MoU) with the Official Creditor Committee (OCC), a grouping of bilateral lenders, including major economies such as Japan, India, and France.
Under the new agreement, Hungarian Export Credit Insurance PLC will extend debt relief to Sri Lanka by rescheduling the outstanding liabilities. This relief is expected to offer the island nation some breathing space as it struggles with tight foreign reserves, inflation, and fiscal constraints.
The official signing was held recently, with Finance, Planning, and Economic Development Ministry Secretary Dr. Harshana Suriyapperuma representing the Sri Lankan Government. On behalf of the Hungarian side, Györgyi Rehoregh, Director of Foreign Corporate Risk Management and Claims and Recoveries, and Dr. Adrienn Hegyi Szénásiné, Head of the same directorate, participated in the formalization of the deal.
Officials noted that beyond easing Sri Lanka’s debt obligations, the agreement marks a positive step in deepening the bilateral relationship between the two countries. Hungary has expressed a continued interest in expanding its cooperation with Sri Lanka, especially in sectors such as renewable energy, water purification, and education technology.
With the IMF-backed debt restructuring programme underway and multiple bilateral talks in progress, Sri Lanka is hoping for a comprehensive resolution that can eventually restore investor confidence and economic stability. The deal with Hungary is a smaller yet symbolically important milestone in this broader path to recovery.
