Sri Lanka to sign restructured debt agreements with bilateral creditors today

Cabinet Co-Spokesman and Minister Bandula Gunawardena 

President Ranil Wickremesinghe yesterday announced that Sri Lanka is on the brink of signing restructured debt agreements with bilateral creditors, a move that will signal the country’s emergence from bankruptcy.

“Sri Lanka stands at the verge of signing restructured debt agreements with our bilateral creditors. Once these agreements are signed on Wednesday (26), we will no longer be a bankrupt country,” President Wickremesinghe declared at the DigiEcon Global Investment Summit 2024.

Separately, Cabinet Co-Spokesman and Minister Bandula Gunawardena confirmed the Cabinet of Ministers’ approval for the signing of these agreements. 

“The President provided an extensive briefing to the Cabinet on the debt restructuring process. Agreements with the Paris Club and other stakeholders are set to be signed on Wednesday (26),” Gunawardena said at the weekly post-Cabinet media briefing.

He stated that following the country’s sovereign default in April 2022, Sri Lanka has been in negotiations with the Paris Club, India and China for debt restructuring, where in-principle agreements were reached last year. The finalised agreements, which include Memorandums of Understanding (MOUs), are crucial for restarting stalled projects and securing new financing. 

“Relevant State Ministers and a team of Sri Lankan officials have already left the country to sign the agreements,” Gunawardena added.

Following the signing, President Wickremesinghe will address the Parliament and the nation, providing details on the economic situation.

According to the Finance Ministry, in 2023, Sri Lanka carried out total debt service payment of 

$ 1.44 billion of which, $ 1 billion was in lieu of principal repayments and the balance $ 408.6 million for the payment of interest.