China Pledges Support for Sri Lanka's Debt Sustainability Amid $4.2 Billion Deal

COLOMBO (News 1st); China says that it stands ready to work with relevant countries and international financial institutions to support Sri Lanka in realizing debt sustainability.

Chinese Foreign Ministry Spokesperson Mao Ning speaking to reporters in Beijing said that the Export-Import Bank of China was the first to tentatively agree with Sri Lanka on debt treatment, which has been crucial for Sri Lanka to advance fiscal reform and win further support from international creditors.

Sri Lanka signed debt treatment Agreements in Beijing with China Exim Bank to restructure USD 4.2 billion of debt on Wednesday (26).

The President's Media Division said that the Framework Agreement related to this was signed between Sri Lanka and China in Colombo, Sri Lanka. This restructuring provides significant debt relief, allowing Sri Lanka to allocate more funds to essential public services & resume concessional financing for critical infrastructure development, said the President's Media Division.

State Minister Shehan Semasinghe shared the following on X:

"We are pleased to announce that Sri Lanka signed debt treatment agreement with Export Import Bank of China to restructure USD 4.2 billion of its debt. This move is part of an ongoing effort to manage the country's financial challenges. The framework agreement for this debt treatment was signed between Sri Lanka and China in Colombo. The debt treatment agreement is a crucial step for Sri Lanka in stabilizing its economy and addressing its debt crisis"