News
China asked to share debt terms to facilitate overall process
Sri Lanka wants China to share with other creditors the terms of its recent $4.2 billion bilateral debt deal, a step needed to help the country speed up the process of restoring its finances over a year after it defaulted.
Sharing the information would ensure transparency and assure other bilateral creditors that they’re getting a comparable deal, news agencies have quoted Central Bank Governor Dr. Nandalal Weerasinghe, as sayng at a panel discussion on Friday.
The request from Sri Lanka comes as it seeks to finalise a deal with its official creditor committee, co-led by Japan, India and the Paris Club, an informal and influential group of Western lenders. The South Asia nation defaulted in May 2022 and owes more than $12 billion in overseas bonds, according to the government’s quarterly debt bulletin.
Sri Lanka’s debt restructuring is among a few test cases of the IMF-led efforts to develop new guidelines among rich and poor countries to manage defaults. That’s mainly driven by China’s limited experience restructuring distressed loans after its rise over the past decade to become the biggest bilateral lender to emerging markets, as well as a bigger role played by private creditors.
Sri Lanka is asking China to share the deal terms “with all other creditors” as soon as possible to “make it more transparent and ensure comparability so that we can make progress,” Weerasinghe said. “Because this is a bilateral agreement, obviously, we need to have a consensus from the other party to share that information.”
Private creditors are seeking a separate deal. An ad hoc group of bondholders, organised by advisers including Rothschild & Co., recently submitted a proposal to Sri Lanka that includes taking a 20% haircut and issuance of new debt, including a so-called macro-linked bond.
Incorporating China, along with other rising bilateral creditors, such as India and Saudi Arabia, into the established order of the Paris Club, has been a lengthy process and a main focus of the International Monetary Fund’s annual meetings this week in Morocco.
Beijing made an unexpected announcement earlier this week of a deal between Sri Lanka and the Export-Import Bank of China, which has increased confusion over the process. The IMF and other creditors also weren’t aware of the development, and Weerasinghe on Friday said that the announcement was “a bit of a surprise” to the Sri Lanka government as well.
The issue will likely be in focus when Sri Lanka’s President Ranil Wickremesinghe travels to China to participate in the Belt and Road Forum in Beijing. About 40% of its bilateral debt is owed to China and 16% to India, according to estimates from the IMF.
Separately, the IMF is assessing Sri Lanka’s progress toward meeting economic and reform targets under the nation’s $3 billion bailout package. A staff-level agreement is the first step needed in order for a second tranche of $334 million in loans.
Sri Lanka and the IMF are close to reaching such a staff-level agreement following talks in Morocco this week, according to people involved in the discussions, who asked not to be identified because the matter isn’t finalized yet.
The Bribery Commission on Friday filed a corruption case against former Investment Promotion Minister Lakshman Yapa Abeywardena and ex-BOI Director General Jayantha Edirisinghe, accusing them of misusing public cash for a lavish newspaper ad campaign back in 2014.
They stand accused of siphoning Rs. 1.7 million in state funds to publish 11 newspaper supplements marking the second inauguration anniversary of then-President Mahinda Rajapaksa on November 19, 2014.
According to the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), the move amounted to a clear breach of anti-graft laws, with five formal charges now filed before the Colombo High Court.
The case, centred around alleged misuse of Board of Investment (BOI) funds, is backed by 21 pieces of documentary evidence and testimony from 15 witnesses.
The Bribery Commission maintains that the ad blitz had no official sanction and led to a direct loss of Rs. 1,748,877.76 to the state.
Inspector General of Police T.M.W. Deshabandu Tennakoon is set to face formal questioning tomorrow (May 19) over serious allegations of misconduct and abuse of power, parliamentary sources said on Friday.
A special committee appointed to investigate the claims will commence formal proceedings next week, following several rounds of preliminary discussions held within the parliamentary complex in recent weeks.
The IGP has been officially notified to appear before the committee and is expected to face the inquiry for the first time at 2:00 PM in Committee Room No. 8.
The committee, which met again on Thursday (15) to finalise arrangements, is investigating allegations that Tennakoon misused his official powers in a manner deemed severe and improper.
A shocking total of 53 elephants have died and 17 more have been injured in train collisions across Sri Lanka between 2020 and 2024, it was revealed at a recent meeting of the Parliamentary Committee on Public Accounts (COPA), parliamentary sources said on Friday.
The figures emerged during a session chaired by MP Aravinda Senaratne to review the 2023 Auditor General’s report and the current performance of the Sri Lanka Railways Department.
Despite a 2018 survey that identified key elephant crossings along railway lines, officials admitted there has been no meaningful reduction in fatal collisions. On the contrary, the crisis appears to be escalating.
Officials from the Department of Railways told the committee that nearly 200 elephants are now estimated to roam near railway tracks on a daily basis, significantly increasing the risk of fatal encounters.
While some short-term fixes have been implemented, officials confirmed that discussions are ongoing with the Department of Wildlife Conservation to develop long-term solutions.
The committee emphasised the urgency of the issue, noting that the 2018 survey —which ran from October 11 to 15 that year—had pinpointed high-risk zones. However, six years on, elephants continue to die in preventable accidents.
COPA members in attendance included State Ministers Major General (Retd.) Aruna Jayasekera and Sugath Thilakaratne, along with MPs Chandana Sooriyaarachchi, Oshani Umanga, Dinindu Saman Hennayake, T.K. Jayasundara, Ruwanthilaka Jayakodi, Attorney-at-Law Thushari Jayasinghe, Ajantha Gammaddage, Susantha Kumara Navarathna, and Lal Premanath. Several senior government officials were also present.
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