Sri Lanka and France sign external debt restructuring agreement

Wednesday, 18 June 2025 00:10 - - {{hitsCtrl.values.hits}}

Reschedules € 390 m in debt till 2042 with five-year grace period and capped interest rates
France reaffirms support for economic revival in SL
Deal aligns with IMF’s € 2.8 b EFF program and ensures comparability of treatment for all creditors

Marking a major step forward in ongoing external debt restructuring efforts, the Finance Ministry yesterday announced the signing of a bilateral agreement with France to reschedule

€ 390 million in outstanding loans.

The official signing ceremony took place on Monday, marking a significant milestone in the country’s path toward stabilising its debt and restoring financial sustainability.

The bilateral agreement was signed by the Finance, Planning, and Economic Development Ministry Secretary K.M. Mahinda Siriwardana on behalf of the Government of Sri Lanka and Multilateral Affairs, Trade and Development Policies Department, Directorate-General of the Treasury Assistant Secretary William Roos on behalf of the Government of French Republic. The Ambassador of France to Sri Lanka Rémi Lambert and Sri Lankan authorities including Deputy Finance Minister Dr. Harshana Suriyapperuma and Central Bank of Sri Lanka Governor Dr. Nandalal Weerasinghe was also present at the signing ceremony.

Issuing a statement, the Finance Ministry noted that the conclusion of the Exchange of Notes and signing of the Bilateral Agreement will certainly pave the way to developing further the deep and longstanding bilateral relationships between the Government of French and the Government of Sri Lanka (GoSL).

It added that the signing of the bilateral agreement with the Government of French Republic is a significant milestone of the external debt restructuring process and testament to GoSL’s commitment to conclude the restructuring process as soon as possible to restore debt sustainability and thereby revamp Sri Lanka’s economy.

“The Government of the French Republic has played a pivotal role in spearheading Sri Lanka’s external debt restructuring process, co-chairing the Official Creditor Committee (OCC) alongside Japan and India. Its leadership, commitment, and constructive engagement have been instrumental in helping Sri Lanka navigate the challenges of economic recovery. This spirit of cooperation has enabled the GoSL to make meaningful progress toward restoring debt sustainability,” the statement added.

A separate statement issued by the Embassy of France noted that this bilateral agreement reschedules a debt stock of € 390 million till 2042, with a five-year grace period and a cap on original interest rates.

“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 added.

It also noted that the move supports the implementation of the International Monetary Fund’s multi-year financing program amounting to € 2.8 billion.

“The signing was an opportunity for France to reaffirm its support for Sri Lanka’s economic recovery,” it stated.

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