Sri Lanka, Japan agree to resume stalled projects including light rail
Reuters says Sri Lanka and Japan have agreed to collaborate on reviving stalled bilateral projects, including a $1.5 billion Japanese-funded light railway.
This agreement was announced during Japanese Foreign Minister Yoko Kamikawa’s visit to Sri Lanka on Saturday (May 4).
Sri Lanka, grappling with restructuring its foreign debt following a severe financial crisis in 2022, is eyeing a $2.9 billion IMF bailout.
Kamikawa expressed Japan’s anticipation for the prompt signing of a Memorandum of Understanding (MoU) between Sri Lanka and the official creditor committee, co-chaired by Japan, aimed at aiding in the restructuring of Sri Lanka’s bilateral debt.
“I also conveyed Japan’s intention to further support Sri Lanka’s development by swiftly resuming yen loan projects once the MoU on debt restructuring is signed and the Sri Lanka government’s intention to swiftly conclude a bilateral agreement is confirmed,” Kamikawa told reporters in Colombo.
Sri Lanka withdrew from the rail project in 2020 amid shifting alliances towards China under the former president.
However, the Sri Lankan cabinet has recently approved President Ranil Wickremesinghe to determine the appropriate timeline to reactivate projects with Japan.
With approximately $2.7 billion in outstanding loans, Japan stands as Sri Lanka’s largest bilateral lender after China, with India following as the third significant creditor.
Sri Lanka’s Foreign Minister Ali Sabry expressed confidence in finalizing necessary agreements in time for the upcoming IMF review.
Latest Headlines in Sri Lanka
- Sri Lanka Central Bank Governor confident of debt repayment and rating upgrade July 27, 2024
- Chamari Athapaththu leads Sri Lanka to thrilling win over Pakistan, sets up final against India July 27, 2024
- Sri Lanka’s security chiefs instructed to ensure safety during Presidential Election July 26, 2024
- Sri Lankan Prime Minister says President cannot appoint acting IGP July 26, 2024
- Bonds placed for Ranil Wickremesinghe to contest Sri Lanka’s Presidential Election July 26, 2024