External debt up $ 100 m QoQ to $ 37.2 b by end Sept.

Wednesday, 10 December 2025 03:08 - - {{hitsCtrl.values.hits}}

The external debt stock reached $ 37,238 million at end-September 2025, rising $ 100 million from the previous quarter, according to the Public Debt Management Office’s latest Quarterly Debt Bulletin.

Although Sri Lanka remains locked out of international capital markets it continues to access and service loans from multilateral agencies such as the World Bank and Asian Development Bank.

Sri Lanka settled $ 1.36 billion in external debt servicing in the first half of 2025, covering 55% of the $ 2.45 billion due for the full year, according to data from the Public Debt Management Office and the Central Bank of Sri Lanka (CBSL). This leaves $ 1.09 billion to be met in the second half of the year.

CBSL Governor Dr. Nandalal Weerasinghe recently said that annual external debt servicing will average around $ 2.75 billion till 2027 under current commitments. From 2028 onwards, it is projected to rise, reaching between $ 3.2 billion and $ 3.5 billion, and peaking at close to $ 4 billion in certain years within the next decade, he said.

According to the 3Q 2025 Debt Bulletin, multilateral lenders account for 37% of the external portfolio, followed by commercial debt at 34% and bilateral debt at 29%. ISBs continue to dominate commercial liabilities, representing roughly 81% of the category, with the balance comprised of syndicated foreign-currency term facilities.

The ADB and the World Bank together make up more than 83% of multilateral exposures.

Among bilateral creditors, 59% of outstanding loans are from non-Paris Club lenders, while 41% originate from Paris Club members.

The bulletin records substantial progress in the external debt restructuring process since the country defaulted its debt in April 2022. On 26 June 2024, Sri Lanka concluded debt treatment agreements with the Official Creditor Committee and separately with the Export-Import Bank of China.

Amendment arrangements were signed to operationalise both sets of agreements. The restructuring of loans from the China Development Bank was completed through amendment agreements on 24 December 2024.

Commercial restructuring proceeded in parallel. An agreement in principle with ISB holders was reached on 19 September 2024, with the subsequent bond exchange finalised on 16 December 2024. Participation reached nearly 98%, enabling almost the entire stock of defaulted ISBs to be converted into new instruments.

Progress with Paris Club creditors continued through 2025. Sri Lanka concluded bilateral amendatory agreements with Japan on 24 March 2025, with the Export-Import Bank of India on 25 March (Lines of Credit) and 3 April (Buyer’s Credit Agreements), and with the Government of France on 16 June. Agreements with EXIM Bank of Hungary on 01 July and the United Kingdom on 22 August brought total completion of restructuring commitments to about 94%

More recently, SriLankan Airlines reached an agreement in principles with external Bondholders holding $ 175 million worth of debt instruments.

With these arrangements in place, the Government has resumed regular debt servicing to the respective creditor partners.