Sri Lanka's $1 bn debt restructured by IMF
ECONOMY & POLICY

Sri Lanka's $1 bn debt restructured by IMF

Sri Lanka's financial distress is prompting a comprehensive approach to its debt burden. The International Monetary Fund (IMF) is leading a restructuring program, targeting more than $1 billion in debt owed to India. This debt is a component of India's Line of Credit, which supported Sri Lanka's infrastructure development, encompassing roads, energy, water, and housing projects.

Presently, India's exposure to Sri Lanka amounts to around $3 billion. As part of the restructuring, potential debt "haircuts" for international lenders are being explored, although specific details are yet to be finalised. N. Ramesh, Deputy Managing Director of EXIM Bank of India, stated that various options are being considered, such as reducing principal amounts or extending repayment periods.

The IMF-approved extended arrangement, totaling $3 billion, serves to bolster Sri Lanka's economic policies and reforms over a 48-month period. With Sri Lanka's total foreign debt, including India's, at $41.5 billion, this restructuring initiative is a pivotal step toward stabilising the nation's financial outlook.

India remains committed to assisting Sri Lanka's economic development, particularly in enhancing transportation networks. Despite the challenges, cooperation endures between the two neighbouring countries. As Sri Lanka advances its domestic debt restructuring, the path is being paved for addressing obligations owed to foreign creditors. The completion of this restructuring process is anticipated by September, marking a significant stride toward financial recovery.

Sri Lanka's financial distress is prompting a comprehensive approach to its debt burden. The International Monetary Fund (IMF) is leading a restructuring program, targeting more than $1 billion in debt owed to India. This debt is a component of India's Line of Credit, which supported Sri Lanka's infrastructure development, encompassing roads, energy, water, and housing projects.Presently, India's exposure to Sri Lanka amounts to around $3 billion. As part of the restructuring, potential debt haircuts for international lenders are being explored, although specific details are yet to be finalised. N. Ramesh, Deputy Managing Director of EXIM Bank of India, stated that various options are being considered, such as reducing principal amounts or extending repayment periods.The IMF-approved extended arrangement, totaling $3 billion, serves to bolster Sri Lanka's economic policies and reforms over a 48-month period. With Sri Lanka's total foreign debt, including India's, at $41.5 billion, this restructuring initiative is a pivotal step toward stabilising the nation's financial outlook.India remains committed to assisting Sri Lanka's economic development, particularly in enhancing transportation networks. Despite the challenges, cooperation endures between the two neighbouring countries. As Sri Lanka advances its domestic debt restructuring, the path is being paved for addressing obligations owed to foreign creditors. The completion of this restructuring process is anticipated by September, marking a significant stride toward financial recovery.

Next Story
Infrastructure Energy

KEC Secures Rs 10, 380 Mn Substation Order in Saudi Arabia

KEC International Ltd., a global infrastructure EPC major, and an RPG Group company, has secured a new order worth Rs 10,380 million for the Design, Supply and Installation of a 380 kV GIS Substation in Saudi Arabia.Vimal Kejriwal, MD & CEO, KEC International Ltd., commented, “We are delighted with the successive order wins in our T&D business. In a landmark achievement, we have secured our largest ever substation order. This prestigious order in the Middle East has widened our portfolio and strengthened our presence in the region. With this strategic win, our year-to-date or..

Next Story
Infrastructure Urban

Central Bank of India executes first fully digital SCF deal on PSB Xchange

In a major advancement for India’s banking sector, Central Bank of India (CBI) has successfully completed the country’s first fully digital supply chain finance (SCF) transaction on PSB Xchange—a unified multi-lender platform launched by PSB Alliance. PSB Xchange is designed to connect public and private sector banks, NBFCs, and fintechs with corporates and their channel partners to facilitate supply chain finance and small business loans. The transaction marks the first time a fintech-originated corporate lead has been seamlessly processed through the PSB Xchange ecosystem. The lead fl..

Next Story
Infrastructure Energy

Atlanta Electricals secures Rs 1,835 Mn transformer order from BNC Power

Atlanta Electricals Limited (“Atlanta”) has secured an order worth Rs 1,835 million from BNC Power Projects Ltd for the supply of extra high voltage (EHV) transformers and a bus reactor for its Pugal site. The contract includes a mix of 315 MVA, 400 KV and 100 MVA, 132 KV transformers along with a 400 KV bus reactor. The project scope encompasses design, manufacturing, testing, and supply to the project site. Deliveries will be sequenced following engineering and drawing approvals, offering multi-quarter execution visibility and ensuring a steady production run-rate. The order will be ex..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?