SL advances in foreign financing mobilisation
Sri Lanka has made significant strides in mobilising foreign financing, closely tied to its debt restructuring agreements with international bondholders, lending agencies, and donor countries between 2024 and March 2025. But it is less than the amount mobilised by the Treasury in 2023, Finance Ministry data shows.
Debt restructuring arrangements of Sri Lanka in December 2024 facilitated foreign financing and assisted in economic recovery. However, the continuity of foreign borrowing during this period necessitates careful fiscal management for maintaining long-term debt sustainability and economic stability, officials said.
This achievement has provided a five-year grace period from bilateral creditors and extended repayment periods, creating approximately US$5 billion in fiscal space.
While this process resulted in immediate fiscal relief and improved liquidity, continued foreign borrowing during this period had significant effects.
It has helped the government to set apart resources to critical areas such as infrastructure, healthcare, and economic growth initiatives.
From January to October 2024, the Government entered into 16 agreements with foreign development partners and lending agencies to mobilise foreign financing amounting to $955.5 million, of which $904.7 million was committed in the form of loans. Out of the total loans, $511.5 million and $393 million had been borrowed from the World Bank and the Asian Development Bank (ADB), respectively
Apart from loan agreements, $50.8 million was committed through eight grant agreements with the Government of Japan, Government of Australia and the European Union under Official Development Assistance (ODA) in the first 10 months of 2024.
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