Press Releases

Sri Lanka's Debt Restructuring Efforts and Resumption of the disbursement of Yen Loans
(Statement by Foreign Minister KAMIKAWA Yoko)

July 24, 2024
Japanese
  1. Following the announcement made by the Government of the Democratic Socialist Republic of Sri Lanka in April 2022 regarding a temporary suspension of external debt payments, Japan has temporarily suspended the disbursement of yen loans and other operations related to 11 ongoing projects in Sri Lanka.
  2. Japan has strongly supported Sri Lanka's efforts toward debt restructuring as a co-chair of the Official Creditor Committee together with France and India. On July 23, the signing of the Memorandum of Understanding on debt restructuring between official creditor countries and Sri Lanka was completed, and the Sri Lankan government’s intention to swiftly conclude a bilateral agreement with Japan was also confirmed.
  3. In light of these developments, Japan has decided to resume the disbursement of yen loans and other operations related to the ongoing projects in Sri Lanka.
  4. 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. Japan intends to make further contributions to the sustainable development and growth of Sri Lanka through the resumption of the disbursement of yen loan projects.
(Reference) Developments regarding Sri Lanka’s debt issues
  1. In April 2022, Sri Lanka declared a temporary suspension of external debt payments in response to the economic crisis and requested assistance from the IMF. In September of the same year, Sri Lanka and the IMF agreed at the administrative level on a program (Extended Credit Facility (EFF)) to provide $2.9 billion in loans over four years.
  2. On March 20, 2023, the IMF Board of Governors approved the program after obtaining financial guarantees from major creditor countries.
  3. On April 13, 2023, Japan, together with India and France, announced the launch of a Official Creditor Committee for Sri Lanka’s debt restructuring at the World Bank-IMF meeting.
  4. On November 29, 2023, the Official Creditor Committee and the Sri Lankan government agreed in principle on debt restructuring.
  5. On June 26, 2024, the Official Creditor Committee and the Sri Lankan government reached a final agreement on the Memorandum of Understanding (simultaneously agreed between China (Export-Import Bank) and the Sri Lankan government), which stipulates the details of the debt restructuring.
  6. On July 23, 2024, the signing of the Memorandum of Understanding between all the members of the Official Creditor Committee and Sri Lanka was completed. On the same day, the Sri Lankan Government’s intention to swiftly conclude a bilateral agreement between Japan on debt restructuring was confirmed (by Sri Lanka’s Note Verbale).

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