Sri Lanka government will seek international sovereign bond payment extensions from Paris Club lenders and other creditors following its decision to work out a debt restructuring plan with the International Monetary Fund (IMF), official sources said.

The round table negotiations with sovereign bond holders will be carried out in New York or France in accordance with the convenience of those creditors, he disclosed. Ten per cent of Sri Lanka’s creditors are members of the Paris Club, with Japan being the main bilateral creditor for Sri Lanka.

Negotiations with bond holders in China and India, who are not Paris Club partners, have to be conducted outside the Paris Club.

No final decision has been taken on Sri Lankan officials who will be participating at these negotiations.

Sri Lanka is also exploring the possibility of working out a debt financing package to secure foreign exchange inflows into the country including remittances, a senior Finance Ministry official said.

One of the other alternate strategies is to raise funds from investors to deal with the upcoming debt payments, he added. All these suggestions included Sri Lanka’s plan of bridging finance proposals will be presented to the IMF during discussions to seek their assistance.

He disclosed that official talks were held with bankers from Rothschild & Co. and Lazard on these financing proposals including the debt financing package.

Sri Lanka will hire a global law firm to provide technical assistance on debt restructuring ahead of talks with the IMF on the country’s economic crisis, Cabinet spokesman Minister Ramesh Pathirana said.

In a movement of unity, 12 opposition MPs have called on the Sri Lankan government to negotiate a postponement and restructuring of its $25 billion debt repayments due between now and 2026.

Issuing a joint statement recently they noted that the “only way forward for Sri Lanka is to immediately initiate a multi-step process towards an orderly negotiated postponement and restructure of repayment of its sovereign debt”.

Finance Minister Basil Rajapaksa will be visiting Washington next month to present Sri Lanka’s plan of bridging finance proposals to senior IMF officials, a senior Finance Ministry official revealed.

He will be accompanied by the Treasury Secretary, Central Bank Governor, two top officials each from the Finance Ministry and the Central Bank for these IMF spring meetings, he said.

The government will seek IMF assistance for debt restructuring, foreign exchange crisis, revenue generation and reforming state-owned enterprises, according to Sri Lanka bridging finance plan.

According to former Central Bank Deputy Governor W.A. Wijewardena to rescue Sri Lanka from the present acute foreign exchange crisis, there is no alternative other than getting a longer-term loan of at least $4 billion from the IMF.

It is estimated a total of $5 billion will be need to service debt obligations (principal + interest) and other commitments in 2022, Finance Ministry data showed.

The debt restructuring suggestion was discussed widely in local media and various other public forums during the past one and half years. But it went unheeded up to now.

Sri Lanka, India ink MoUs for defence, economic, education, religious links  

Tightening the defence, economic, education, religious and cultural ties, multiple agreements were inked on the first day of Indian External Affairs Minister S. Jaishankar’s visit to Sri Lanka.

Meeting the three Rajapaksa brothers — President Gotabaya, Prime Minister Mahinda and Finance Minister Basil, as well as and Forign Minister G. L. Peiris ,S. Jaishankar signed six MoUs that are vital for the two countries and future cooperation.

On the security front, an MoU was signed to establish a Maritime Rescue Coordination Centre (MRCC) with a grant of $6 million from India.

Built by the Indian government-owned aerospace and defence electronics company, Bharath Electronics, with the project India is to provide three Dornier maritime surveillance aircraft to Sri Lanka and a 4,000 MT floating barge to Sri Lanka Navy.

The MRCC is to be set up inside the Sri Lanka Navy Headquarters and seven other sub-units are to be positioned around the country including one in Southern city of Hambantota, where the China-run harbour is located.

A separate MoU was signed to implement the Sri Lanka Unique Digital Identity (SL-UDI) programme on a grant of Rs 30 crore.

However both the projects were criticised by Sri Lanka’s opposition and activists claiming that the government was selling the country’s national resources at a cost of national security.

They claimed that through the MRCC, the entire airspace is sold to India under the guise of a security system and positioning of even sub-units in naval bases covering entire Indian ocean around Sri Lanka is calling for a geopolitical war with China. 

Sri Lanka and India have agreed to implement several strategically important projects including Hybrid Power Projects in three islands in Jaffna, Unique Digital Identity (SL-UDI) scheme, and Development of Fisheries Harbours in Sri Lanka.

The two countries have entred into these agreements by signing  six Memorandum of Understandings (MoUs) for the implentaion of strategically important projects  in the presence of Visiting External Affairs Minister (EAM) Dr. S.Jaishankar and Foreign Minister Prof. G.L Peiris in Colombo on Monday 28. 

One of the most important projects was the hybrid power plants in Jaffna, which was initially awarded to MS/Sinosar–Etechwin Joint Venture in China.

During the ongoing visit, Dr. S. Jaishankar assured India’s continued support in Sri Lanka’s economic recovery process.

He reiterated that India’s partnership with Sri Lanka was rooted in the ‘Neighbourhood First’ approach and S.A.G.A.R (Security And Growth for All in the Region) doctrine and that India has stood by Sri Lanka in the hour of its need, foreign ministry sources said. 

The six MoUs are as follows 

§ MOU for the establishment of modern computer labs and smart boards with customized curriculum software in 200 schools in the Galle district.

§ MOU on the implementation of the Sri Lanka Unique Digital Identity (SL-UDI) programme with the Government of India’s Grant Assistance.

§ MOI between the Sushma Swaraj Institute of Foreign Services (SSIFS), India, and the Bandaranaike International Diplomatic Training Institute (BIDTI).

§ MOU for providing Marine Rescue Coordinating Center (MRCC).

§ MOU on the implementation of Hybrid Power Projects in three islands in Jaffna.

§ MOU on Cooperation in Development of Fisheries Harbours in Sri Lanka.

Following the talks with Minister G. L Peiris, Dr. Jaishankar  noted that “he held productive talks with Foreign Minister G.L. Peiris of Sri Lanka.”

“Discussions were centred on  economic recovery,  development partnership, mutual security, fishermen’s issues, and international coordination,” he added.

Dr. S Jaishankar, the Indian Foreign Minister, met with SJB MP and eminent economist Dr. Harsha de Silva, founder of 1990 Suwaseriya, on Tuesday 29 at the 1990 Headquarters in Rajagiriya.

Dr. S Jaishankar reiterated his continued support to Sri Lanka and thanked Dr. Harsha de Silva for his commitment to 1990 Suwaseriya. Minister Sudarshani Fernandopulle and a group of officials including Chairman Dumindra Ratnayake were also present at the occasion.

The project was launched at the initiative of Dr. Harsha de Silva, then a non-cabinet minister of the Yahapalana government and now an Opposition MP.

the 1990 Suwa Seriya Project was launched in the Western and Sabaragamuwa Provinces with 88 ambulances purchased from India with a grant of USD 7.6 million. Following the success of that pilot project, India granted a further USD 15.2 million to cover the whole island with the service.

Today as many as 297 ambulances are operated countrywide and they are a common sight even in remote areas. The service is managed entirely at the expense of the Government of Sri Lanka through the Suwa Seriya Foundation set up by an Act of Parliament. It is run by an eminent group working in an honorary capacity

.the ambulance fleet will be augmented with 112 new vehicles. The situation caused by the current explosion of the Covid pandemic has demonstrated a new the value of this service which has over the past few years on this redoubled its efforts attending not only to medical and accident related emergencies but also in helping the transfer of Covid-infected patients to hospitals.

The country certainly owes a debt of gratitude to India, whose Prime Minister Narendra Modi took a personal interest in the project when Dr. Harsha de Silva first made the request to him while he was here on an official visit some years ago. Equally so to de Silva for all the hard work he has put in to make the project the success it is.