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Harsha accuses govt. of being secretive about debt negotiations with international commercial creditors
By Saman Indrajith
The Samagi Jana Balawegaya (SJB) is not at all satisfied with the furtive manner in which the government is conducting discussions with Sri Lanka’s commercial creditors to restructure 12 billion dollars of debt, SJB MP and Chairman of the Committee on Public Finance (COPF), Dr. Harsha de Silva said.
The SJB MP added that the country’s international commercial creditors account for a large portion of its domestic debt and they have formed a group, i.e. ‘The Ad Hoc Group of Bondholders’ that has procured the services of two powerful consulting firms.
The Group is advised by Rothschild & Co and White & Case LLP as financial and legal advisors, respectively, he said.
Sri Lanka has made some progress with bilateral creditors including China and India, he said.
“China for the first time since it started lending has agreed to accept the same conditions that the other creditors receive. This is a great victory. However, the stumbling block seems to be our dealings with the commercial creditors and I am not sure if we are doing all we can to get a speedy resolution.”
MP de Silva said that early in 2023, the Ad Hoc Group of Bondholders came up with a “Macro-Linked Bond” (MLB) as a way of restructuring the debt. MLB links payouts to the evolution of Sri Lanka’s gross domestic product. They proposed the government the issuance of 10 bonds linked with the country’s macroeconomic health that will mature between 2027 and 2036, he said.
“They have proposed a 20 percent haircut and an interest rate up to 9.5 percent to be paid in cash and in kind.” But if GDP growth is lower than the bondholders expect the interest rates will drop further. The Sri Lankan government said, in October, it was not too keen on this and I don’t blame them.”
In late 2023, White & Case LLP issued a statement on behalf of the Ad Hoc Group of Bondholders. In this statement they said they have repeatedly tried to engage with the Sri Lankan authorities and its advisors in good faith. They say no substantive engagement has taken place between Sri Lanka and its private creditors by December 2023, de Silva said.
“Now it’s mid- March and no one knows what is going on. We have achieved stability, but we have done so by drastically increasing poverty, significant job losses and the closure of small and medium enterprises. Moreover, Sri Lankan workers sacrificed a lot for the government to restructure domestic debt. So people have sacrificed greatly for stability and therefore they need to know what is going on. But the government is secretive and does not tell us anything that is happening with foreign debt restructuring.”
The SJB MP went on to say that Sri Lanka will be able to dispel the moniker of a bankrupt state when it is able to access international capital markets. For this Sri Lanka’s credit rating must improve.
“President Ranil Wickremesinghe says Sri Lanka will shed the moniker of a bankrupt state by April. I think a lot needs to be done before we reach that stage. We are at the bottom of the ratings, and we need to at least get to where the country was before the Gotabaya Rajapaksa administration.”
MP de Silva said that Sri Lanka needs to grow at double digits to escape the current stagnation and that the best way to do it is to explore how the country can benefit from the fast-growing Indian South.
“This will be the fastest growing area in the world in the coming decades. We need to see how we can link with them and benefit.”
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Chemmani mass graves: Govt to seek international forensic help
ECONOMYNEXT –International assistance for forensic analysis of the remains unearthed at the Chemmani mass grave will be sought when the need arises, Sri Lanka’s Minister of has Justice said after opposition legislators urged the government to seek help.
“We have spoken to embassies, we have made all the local finances necessary for excavation. But when it comes to DNA analysis, depending on the type and nature we will definitely have to go for internationally recognised places,” Harshana Nanayakkara said in response to a query in Parliament.
Nanayakkara said that request for international expertise is dependant on the direction the courts give on what needs to be done, after which they will decide which agency best suits the proceedings.
The minister also recognised that local expertise is lacking in the forensic department, and the need to train local staff with the help of international experts.
Opposition MPs argued that the present need is direct help in forensics from international entities, rather than the longer term need to train the staff on analysis.
Currently, the investigation is in the excavation and exhumation stage, conducted by archaeologist Raj Somadeva and his team.
The existence of the Chemmani mass grave was first brought to light in 1998, during the trial of the rape and murder of schoolgirl Krishanti Kumaraswamy.
In February 2025, construction workers found remains near the Sinthupathy Cemetery, and following investigations ordered by the Learned Magistrate, the mass grave was discovered.
412 bodies have been discovered, with 409 bodies recovered as of 23 June 2026. According to the Office on Missing Persons, this is the 17th recorded mass grave in Sri Lanka.
News
ADB approves $57.4 million package to boost Lanka’s rooftop solar drive
The Asian Development Bank (ADB) has approved a $57.4 million financing package to help Sri Lanka expand access to affordable clean energy and reduce greenhouse gas emissions through a large-scale rooftop solar aggregation and virtual net metering programme.
The financing comprises a $35 million concessional loan, $16.9 million in grants from the European Union and $5.5 million from the Japan Fund for the Joint Crediting Mechanism. With additional contributions from implementing agencies, the total estimated cost of the project is $80.5 million.
Under the Rooftop Solar Aggregation and Virtual Net Metering Project, two state-owned utilities — Electricity Distribution Lanka (Private) Limited and Lanka Electricity Company (Private) Limited — will introduce a scalable model to collect electricity generated from large rooftop solar installations and allocate the benefits virtually among eligible consumers.
The initiative will allow consumers to access solar power benefits without having to install individual rooftop solar systems.
ADB Country Director for Sri Lanka Shannon Cowlin said the project would broaden access to affordable renewable energy while strengthening the resilience and inclusiveness of the country’s power sector.
She said the initiative would also support grid modernisation and digital transformation, while creating employment opportunities and encouraging greater participation of women and youth in the clean energy sector.
The project is expected to benefit micro, small and medium enterprises and community organisations that face financial or space constraints in installing their own rooftop solar systems. Through a social compensation mechanism, eligible groups will receive reductions in electricity costs under the virtual net metering system.
The programme will support around 25 megawatt-peak of rooftop solar capacity while strengthening distribution networks, improving digital capabilities and preparing the national grid to accommodate higher levels of distributed renewable energy.
A dedicated training facility will also be established under the project to develop green skills, enhance women’s participation in the sector and build technical expertise in advanced low-carbon technologies.
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Bond scam case against Mahendran, Ravi K fixed for July 22
The Colombo High Court on Friday ordered that proceedings in the case filed against 11 defendants, including former Central Bank Governor Arjuna Mahendran and former Finance Minister Ravi Karunanayake, over alleged irregularities in the Central Bank bond auction be taken up again on July 22.
The case was called before Colombo High Court Judge Manjula Thilakaratne, who informed court that the Trial-at-Bar bench appointed to hear the matter had not been properly constituted.
Accordingly, the judge directed that the case be recalled on July 22 for further proceedings.
The Attorney General has filed indictments under the Public Property Act against 11 accused, including Mahendran, Karunanayake, Perpetual Treasuries Limited and its directors Arjun Aloysius and Geoffrey Aloysius.
The accused have been charged over alleged irregularities connected to a Treasury bond auction conducted by the Central Bank in March 2016.
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