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Cabraal says debt restructuring underway without IMF assistance

Published

4 years ago

2021/11/18

By Sanath Nanayakkare

Sri Lanka will not seek IMF assistance to restructure its debt, Central Bank Governor Ajith Nivard Cabraal has said, adding that debt restructuring is an ongoing process which the country has already undertaken.

“There are many instances where people ask us whether Sri Lanka needs to restructure its debt repayments. And I tell them, we have to manage our debt without using the word restructuring in a frivolous manner, the Central Bank Governor said on Saturday.

The Central Bank Governor made these comments addressing a virtual meeting hosted by the Centre for Banking Studies to discuss the implications of the National Budget 2022 which was presented in parliament on 12 Nov.

“Every debt situation needs restructuring on an ongoing basis. For example, if you have one debt where the interest rate is 7-8% and if you can find another source from which you can borrow at a cheaper rate, then you would be technically restructuring your debt. This is something that people sometimes don’t realize. In the same manner, you could have a debt which is of a shorter duration and if you’re able to increase the period of the debt and also ensure that your repayments are staggered even more, that is a way of restructuring your debt. If you can change the mix of your debt, from foreign currency, to local currency or between foreign currencies, that again is a type of restructuring of your debt portfolio which is to your advantage. That process is underway” he said.

“Sri Lanka has also understood that its reliance on International Sovereign Bonds (ISB) has been quite sharp and in the last few years, there has been a fairly extensive reliance on ISBs. Now this has to be re-shifted in some way so that we would have a greater control, within a long period of time. That’s why the government, very rightly, with the Central Bank is now examining the option of having government to government loan situations, central bank to central bank swaps, the examining of the possibilities of securitising remittances as well as other inflows. These are all new options the government is considering, together with the raising of non-debt creating inflows, monetisation of certain assets, increasing the value of exports and remittances. These are all natural options the Central Bank and the government are examining to ensure the debt profile is a lot more sustainable. Several of these ideas have already been put into action. We have spoken about it in the Central Bank’s Road Map as well. In the next few months, you will see a large number of these being implemented to position Sri Lanka on a debt sustainable path,” he said.

“When the proposals of the National Budget 2022 and the contents of the Central Bank’s Road Map are diligently implemented, Sri Lanka’s macro-fundamentals would look much better than now, and the country would be well on course for a 6% plus growth with stability.

“We are looking at 5% growth this year, of course on a much lower base of last year’s negative growth of 3.6%. But given the circumstances, that’s a reasonable number for this year. If the Year 2022 turns out to be a good year and Sri Lanka Tourism inflows also recover to about one-fourth of what it used to be prior to 2019, I think Sri Lanka would record an economic growth of more than 6% in 2022,” he said.

“The Central Bank will ensure that financial system stability is maintained, while growth is achieved in order to support the government to attract investments. Already there are several areas of investments planned, particularly in the Port City. The Port City Commission Bill has already been passed which gives massive opportunities for those who are looking to do business there. A study by a leading accounting firm has said that the Port City project would add 13.8 billion U.S. dollars to the country’s economy. That is a substantial number. If we can get that going, along with the organic growth of our own economy, we will have extremely useful economic indicators that would show the true potential of our economy whereby the private sector should be able to very keenly deliver on the promise of its full capacity”.

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Navy spearheads construction of Cath Lab at Hambantota Hospital

Published

1 min ago

2026/01/20

Sahan Weerasooriya

The ceremonial commencement of construction work on a new Cardiac Catheterization Laboratory building took place at the Hambantota District General Hospital on 15 Jan 26.

Navy headquarters statement: “Marking a significant milestone in its social service and community health initiatives, the Sri Lanka Navy enables its industrial expertise for this project. Further, the generous financial contribution of a philanthropic Sri Lankan couple residing in the United States supports this vital initiative.

The Deputy Area Commander (South), Commodore Aruna Weerasinghe, Director General of Health Services, Dr. Asela Gunawardena, staff of Hambantota District General Hospital and a group of naval personnel were present on this occasion.”

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PM departs Sri Lanka to participate in the 56th World Economic Forum Annual Meeting in Davos-Klosters, Switzerland.

Published

11 hours ago

2026/01/19

Priyan

Prime Minister Dr. Harini Amarasuriya departed Sri Lanka on this morning (19 January) to participate in the 56th Annual Meeting of the World Economic Forum (WEF), to be held in Davos-Klosters, Switzerland, from 19 to 23 January 2026.

The World Economic Forum 2026 will be convened under the theme “A Spirit of Dialogue” and will bring together over 3,000 global leaders, including heads of state, government leaders, chief executive officers of leading multinational corporations, policymakers, and technology innovators.

During the visit, the Prime Minister is scheduled to hold a series of high-level bilateral meetings with key international leaders, heads of global institutions, and other distinguished dignitaries.

(Prime Minister’s Media Division)

News

Coal scandal: Govt. urged to release lab report

Published

24 hours ago

2026/01/19

Thilina Walpola

Pubudu Jagoda

The government is under mounting pressure to release a foreign laboratory report on the controversial coal consignment imported for the Lakvijaya Power Plant, with the Frontline Socialist Party (FSP) accusing the authorities of political interference and tender manipulation.

Speaking to the media after a party meeting in Homagama yesterday, FSP Education Secretary Pubudu Jagoda demanded an immediate explanation for the delay in disclosing the report from a Dutch laboratory, Cotecna, which was commissioned to test samples of the coal stocks in question after doubts were raised about an earlier local laboratory assessment. Jagoda said Cabinet media spokesperson Dr. Nalinda Jayatissa had announced that the report would be submitted by 16 January, but it had yet to be made public.

“The Sri Lankan lab confirmed the coal was substandard and could damage both the environment and power plant machinery. The foreign lab has independently verified the same results, we are told. Yet, political pressure appears to be delaying the release of the report.” He warned that any attempt to issue a false report would eventually be exposed and urged the government and the laboratory to maintain transparency.

SLPP MP D.V. Chanaka told Parliament last week that while 107 metric tonnes of coal were normally required per hour to generate 300 megawatts, but as many as 120 tonnes of newly imported coal were needed to produce the same amount of power due to its lower calorific value. Tests showed the first two shipments had calorific values of 5,600–5,800 kcal/kg, below the required minimum of 5,900 kcal/kg, said.

Jagoda accused the government of tailoring procurement rules to benefit an Indian supplier, citing a drastic reduction in reserve requirements—from one million metric tonnes in 2021 to just 100,000 tonnes in 2025—and alleged previous irregularities by the company, including a 2016 Auditor General finding regarding a rice supply contract and the 2019 suspension of a key agent of the company by the International Cricket Council over match-fixing.

He further criticised systemic manipulation of the coal tender process, including delays in issuing the tender from the usual February-March window to July, and progressively shortening the submission period from six weeks to three, giving an advantage to suppliers with stock on hand.

The Ministry of Energy recently issued an amended tender for 4.5 million metric tonnes of coal for the 2025/26 and 2026/27 periods, following the cancellation of an earlier tender. Jagoda warned that procurement delays and irregularities could trigger coal shortages, higher spot-market purchases, increased electricity costs, and potential power cuts if hydropower falls short.

Jagoda called for urgent investigations into the procurement process, insisting that any mismanagement or corruption should not be passed on to the public.Denying any wrongdoing, the government has said it is waiting for the lab report.

by Saman Indrajith ✍️