Government continues debt servicing of multilateral lenders
The government is continuing negotiations with bilateral and multilateral lenders including World Bank and Asian Development Bank along with donor countries to secure financing support for development projects, a Finance Ministry report revealed.
Relevant agreements will be signed for foreign financing this year following the IMF Executive Board review to confirm that multilateral partners are continuing their financing contributions to Sri Lanka,
The next steps on the debt restructuring are to conclude the negotiations with external commercial creditors and to implement agreements in principle with official creditors, Julie Kozack Director of the Communications Department at the International Monetary Fund told the press briefing in Washington this week.
The domestic debt operations, part of the debt restructuring, are largely completed, and there is a strong expectation that agreements with commercial creditors consistent with programme parameters will be reached by completion of the second IMF review, she added.
In line with the interim policy adopted by the Government, the servicing of the external debt of affected loans obtained from bilateral and commercial creditors has been temporarily suspended for an interim period commencing from 12th April, 2022.
However the government is continuing, the servicing of the debt of multilateral agencies like the World Bank, International Monetary Fund and Asian Development Bank.
The government will have to repay the accumulated foreign debt service payment amounting to US$ $4.38 billion this year and settle $ 1billion International Sovereign Bond which has matured in March 2024, ministry data shows.
Accordingly principal repayment for foreign loans was at $2.07 billion and interest $540 million to multilateral financial agencies like the World Bank and Asian Development Bank
The government has already repaid $1.91 billion since February 2022 till February 2024 under the present administration, according to computation of quarterly debt reports of the ministry.
The total debt repayments of multilateral agencies during the period of July 2022 to February 2024 amounted to $1.34 billion. It has also repaid a bilateral loan instalment of $571 million during this period.
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