President Ranil Wickremesinghe is set to depart for China tomorrow. During his visit, President Wickremesinghe is scheduled to meet with Chinese President Xi Jinping and engage with various political and business leaders.
One of the primary objectives of this visit is to reach an agreement on debt restructuring with China. Sri Lanka is currently facing challenges in securing debt relief from China, but the Ministry of Finance has confirmed that a preliminary debt treatment agreement has been reached with the Export-Import Bank of China for approximately USD 4.2 billion in outstanding debt.
This is a crucial step as Sri Lanka seeks to resolve its financial challenges, having declared bankruptcy last year and completed the domestic debt optimization process.
In March, the government agreed on an Extended Fund Facility (EFF) arrangement that will provide access to around USD 2.9 billion over a four-year period. While Sri Lanka has already received USD 330 million, negotiations are ongoing to sign a staff-level agreement to secure the second tranche under the EFF program.
Sri Lanka has also received debt assurances from India and the Paris Club. Furthermore, a joint committee has been established with the participation of Japan, India, and France to support Sri Lanka's debt restructuring process.
