COLOMBO: Sri Lanka signed a deal with Japan on Friday (Mar 7) to restructure US$2.5 billion in loans, marking the first agreement with official creditors who had pledged debt relief to the cash-strapped nation last year.
Japan said it was granting concessions on a 369.45 billion yen (US$2.5 billion) loan under a comprehensive debt treatment plan, which the International Monetary Fund considers essential for Sri Lanka's economic recovery.
"The development of Sri Lanka, which is located at a strategic point in the Indian Ocean, is essential for the stability and prosperity of the entire Indo-Pacific region," the Japanese foreign ministry said in a statement.
"Japan intends to further contribute to the sustainable development of Sri Lanka."
Colombo's finance ministry said Tokyo had played a "pivotal role" in helping Sri Lanka restructure its debt.
"Its leadership, commitment, and constructive engagement have been instrumental in helping Sri Lanka navigate the challenges of economic recovery," the ministry said in a statement.
Sri Lanka announced last June that it had reached an understanding with all its bilateral lenders to delay repayments until 2028.
Formal agreements were delayed due to protracted negotiations, making Friday's deal with Japan the first with an official creditor of the South Asian nation.
https://www.channelnewsasia.com/asia/sri-lanka-japan-sign-25-billion-deal-japan-4985591
