By In a statement issued on Friday, Japan, in collaboration with France and India, reiterated its role as a co-chair of the committee comprising 15 creditor nations and said that early completion of the signing of a Memorandum of Understanding (MoU) between Sri Lanka and creditor nations on debt restructuring needs to be finalised soon. The agreement was reached in principle late last year.
The joint committee, known as the Official Creditor Committee (OCC), underscores the importance of transparency and comparability in agreements with creditors outside its formal purview.
The debt restructuring agreement reached in November between Sri Lanka and its creditors covers approximately $5.9 billion of outstanding public debt. This comprehensive agreement involves a combination of long-term maturity extensions and a reduction in interest rates. However, it is crucial to note that China, as Sri Lanka’s largest bilateral creditor, has independently forged a deal with the island nation but has not formally joined the OCC.
Sri Lanka’s total external debt stands at an estimated $36.4 billion, including $10.81 billion of bilateral debt, as reported by its finance ministry in September. To successfully conclude the second review of a $2.9 billion bailout from the International Monetary Fund, Sri Lanka faces the imperative task of securing debt restructuring agreements with both bilateral creditors and bondholders, ideally before March.
