France and Sri Lanka signed a bilateral agreement to implement the recommendations of the Memorandum of Understanding on the debt restructuring of Sri Lanka, concluded on June 26, last year with the official creditors committee − co-chaired by France, India and Japan and composed of these countries with the Paris Club creditors.
The bilateral agreement reschedules a debt stock of EUR 390 million until 2042, with a five-year grace period and a cap on original interest rates.
The bilateral agreement signed on June 16 by Assistant Secretary for Multilateral Affairs, Trade and Development at the French Treasury, William Roos and Secretary to the Treasury of the Ministry of Finance, Planning and Economic Development, Mahinda Siriwardana, is a key step in France’s support for Sri Lanka’s economic recovery.
This agreement aims to restore Sri Lanka’s debt sustainability, based on a coordinated approach between the country’s main official creditors and in compliance with the principle of comparability of treatment for third-party creditors in the scope of the restructuring. It also supports the implementation of the International Monetary Fund’s multi-year financing program amounting to EUR 2.8 billion.
