Foreign Minister S. Jaishankar is expected to visit Colombo this week to meet with stakeholders and discuss the debt restructuring, ET has learned.
As Sri Lanka defaulted on its debt repayments, it is negotiating a $2.9 billion bailout from the International Monetary Fund, which has expressed its unwillingness to release funds until India and China agree to pay Sri Lanka’s debt to reduce. Sri Lanka’s central bank has urged creditors India and China to restructure their debt.
China has loaned nearly $7 billion to Sri Lanka, which owes India around $1 billion. In addition, India provided around US$4 billion in financial assistance to Sri Lanka in 2022.
“The visit of India’s Foreign Minister is expected on January 19 and we will continue to hold talks on India’s debt restructuring,” Sri Lankan President Ranil Wickremesinghe said in Colombo last week.
He had said that Sri Lanka would receive nearly $5 billion from the World Bank and the Asian Development Bank. “The total will be $7.5 billion, including the IMF. Add in $3 billion from restructuring unprofitable government agencies, and that could add up to $10 billion, allowing the economy to recover and lifting the country out of this affliction,” Wickremesinghe said.
China, Japan and India are Sri Lanka’s largest bilateral creditors, and Colombo counts on their cooperation for its economic prosperity.
