Sri Lanka’s total external debt exceeds USD 50 billion, with a significant portion, roughly ten per cent, owed to China….reports Asian Lite News
Debt relief for low income countries should be a part of the green transition, said Sri Lankan President Ranil Wickremesinghe during a panel on greening the Belt and Road Initiative in Beijing on Wednesday.
Development banks such as the Asian Infrastructure Investment Bank should also make more funding available, he added.
Sri Lanka’s total external debt exceeds USD 50 billion, with a significant portion, roughly ten per cent, owed to China. This debt encompasses official loans and less visible commercial borrowings from Chinese commercial banks.
Notably, Sri Lanka owes USD 119 million to the China Development Bank Corporation, USD 232 million to the China Development Bank, and USD 232 million to the Export-Import Bank of China, according to Daily Mirror, a daily English-language newspaper published in Sri Lanka.
Despite China’s promises to assist in debt restructuring, tangible actions have been limited. Sri Lanka urgently requires a USD 3 billion bailout package from the International Monetary Fund (IMF), with the first instalment already received. The release of the crucial second tranche hinges on China and other bilateral lenders restructuring their debt terms with Sri Lanka.
According to Daily Mirror, China initially participated in discussions with other creditors, including India and Japan, offering a two-year moratorium on debt repayments and even exploring the possibility of providing new loans. However, China later altered its stance, creating roadblocks in Sri Lanka’s efforts to secure IMF aid.
Other leaders from Africa, Southeast Asia, Central Asia and the Mideast will attend the Belt and Road Forum in Beijing. Russian President Vladimir Putin is also expected to attend.