Demand details of agreements with countries including China by Sri Lanka’s creditors

Colombo. Bilateral lenders who agreed to restructure Sri Lanka’s debt worth about six billion US dollars have demanded “comparability of behavior” with other lenders including China.
The Official Committee of Creditors (OCC), led by Japan, France and India, requested details of Colombo’s other debt agreements, according to a statement obtained by AFP on Thursday.
The group agreed on Wednesday in Paris to restructure debt worth 5.8 billion US dollars.
But on the same day, Colombo made another deal with China’s Exim Bank for 4.2 billion US dollars.
The OCC, which includes the United States, Canada and several European countries, said it had asked Colombo to provide “all information necessary for the OCC to ensure comparability of the issue”.
Colombo also hoped to reach a deal with private lenders “at least on favorable terms” as proposed by the OCC.
In April 2022, Sri Lanka was unable to pay its foreign debt due to shortage of foreign currency and the unimaginable financial crisis forced the resignation of then President Gotabaya Rajapakse.
Sri Lanka had hoped to speed up debt restructuring under the International Monetary Fund’s (IMF) $2.9 billion bailout program, but the process was stalled by delays in reaching a deal with China.
Beijing is by far Sri Lanka’s largest single lender, but Chinese subsidy concessions are split between bilateral loans and private commercial loans.
US$4.2 billion of China’s bilateral loans were dealt with under debt restructuring on Wednesday, but no information was provided on the US$2.18 billion loan from China Development Bank, which is considered a private commercial loan.
According to sources involved in the process, the loan from China Development Bank is likely to be treated as a $12.55 billion international sovereign bond.
Sri Lanka’s total foreign debt is estimated at 37 billion US dollars, according to government fund statistics as of the end of March.
Out of a total of 10.58 billion US dollars, China has loaned Colombo 4.66 billion dollars, Japan 2.35 billion dollars and India 1.36 billion dollars.