Some of the key stalled development projects in the country will once again get re-started with Sri Lanka successfully signing debt restructuring agreements with the Official Creditor Committee and China EXIM Bank, says CT CLSA research.
“With the completion of debt restructuring, President Ranil Wickemesinghe expressed confidence in the resumption of certain projects like the expansion at the Katunayake Airport, Colombo Light Rail Transit project, expressway projects, etc,” the report said.
Sri Lanka reached its final debt restructuring agreements on bilateral debt with the official Creditor Committee (led by Japan, France and India) and the Export-Import Bank of China on June 26,2024.President Ranil Wickremesinghe in his address to the nation on June 26 stated that as part of the agreements signed bilateral loan payments will be deferred until 2028 and repayments, on concessional terms, will take place between 2028 and 2043.
The agreements signed are to be tabled in Parliament on July 2, 2024. The restructuring of commercial debts are yet to be finalised with the officials continuing to work with relevant parties. The President stated that in 2022, Sri Lanka’s foreign debt payments amounted to 9.2% of GDP. However, this is expected to decline to 4.5% of GDP between 2027E and 2032E with the conclusion of the debt restructuring initiatives. The President also stated that foreign-funded development projects had been suspended following Sri Lanka’s decision to stop debt repayments in 2022.
