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Japan to resume funding for stalled projects in Sri Lanka following debt restructuring agreement

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Mizukoshi Hideaki

Japan will resume funding for all stalled projects in Sri Lanka, Mizukoshi Hideaki – Japanese ambassador to Colombo announced on Wednesday (24), at a ceremony with finance ministry officials.This marks the first such announcement since Sri Lanka finalized a $10 billion restructuring deal with its official creditors.

A total of 11 projects will be restarted, bringing in $1.1 billion in funds over the next five years.

Sri Lanka began discussions with Japan earlier this year about resuming suspended projects as part of efforts to revive its economy following a severe foreign exchange crisis in early 2022, which led to a foreign debt default.

Bilateral creditors, including Japan, China, and India, signed a $10 billion debt rework agreement last month. This deal provides Sri Lanka with the opportunity to defer repayments for four years and save $5 billion in repayments.

Among the projects to be restarted are the expansion of Sri Lanka’s main international airport, as well as water sanitation, healthcare, and other infrastructure projects, Hideaki told finance ministry officials.

Meanwhile, issuing a statement Japanese Foreign Minister KAMIKAWA Yoko, in a statement on 24 July, said the development of Sri Lanka, which is located at a strategic point in the Indian Ocean, is essential for the stability and prosperity of the entire Indo-Pacific region. “Japan intends to make further contributions to the sustainable development and growth of Sri Lanka through the resumption of the disbursement of yen loan projects,” he said.

Given below is the timeline of Sri Lanka’s debt issues, according to Yoko:

1. In April 2022, Sri Lanka declared a temporary suspension of external debt payments in response to the economic crisis and requested assistance from the IMF. In September of the same year, Sri Lanka and the IMF agreed at the administrative level on a program (Extended Credit Facility (EFF)) to provide $2.9 billion in loans over four years.

2. On March 20, 2023, the IMF Board of Governors approved the program after obtaining financial guarantees from major creditor countries.

3. On April 13, 2023, Japan, together with India and France, announced the launch of a Official Creditor Committee for Sri Lanka’s debt restructuring at the World Bank-IMF meeting.

4. On November 29, 2023, the Official Creditor Committee and the Sri Lankan government agreed in principle on debt restructuring.

5. On June 26, 2024, the Official Creditor Committee and the Sri Lankan government reached a final agreement on the Memorandum of Understanding (simultaneously agreed between China (Export-Import Bank) and the Sri Lankan government), which stipulates the details of the debt restructuring.

6. On July 23, 2024, the signing of the Memorandum of Understanding between all the members of the Official Creditor Committee and Sri Lanka was completed. On the same day, the Sri Lankan Government’s intention to swiftly conclude a bilateral agreement between Japan on debt restructuring was confirmed (by Sri Lanka’s Note Verbale).



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Advisory for low pressure area over South-east Bay of Bengal Sea area

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The Natural Hazards Early Warning Centre of the Department of Meteorology has issued an advisory at 11.30 pm on 05 January 2026 regarding a low pressure area over South-east Bay of Bengal Sea area.

The low-level atmospheric disturbance in the Bay of Bengal, to the southeast of the Sri Lanka has intensified into a low-pressure area.

Hence, showery condition over the island, particularly
in the Northern, North-Central, Eastern, Uva and Central provinces is expected to enhance from January 8th.

The Meteorological Department is constantly monitoring the behavior of the system.

The general public are requested to be attentive to the future forecasts and bulletins issued by the Department of Meteorology in this regards.

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US raid on Venezuela violation of UN Charter and intl. law: Govt.

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Herath

Foreign Affairs, Foreign Employment and Tourism Minister Vijitha Herath yesterday (05) told a media conference at his Ministry that the UN should deal with the US for violating international law.

Herath, who is also a senior member of the ruling National People’s Power (NPP) party’s National Executive Council, in addition to being a member of the JVP politburo, emphasised that member states couldn’t violate UN Charter and international laws.

The Minister said so when The Island sought the government’s position on the abduction of legally elected Venezuelan President Nicolás Maduro and his wife in a lightning raid carried out amidst heavy air strikes on that country. We raised the issue at hand pointing out that there were persistent allegations regarding US and Indian interventions in the 2022 regime change operation here and that the NPP finalised defence agreements with Washington and New Delhi.

Minister Herath said that Sri Lanka backed the ongoing UN Security Council bid to deal with the developing situation in Venezuela.

Herath was flanked by Deputy Foreign Minister Arun Hemachandra and Deputy Tourism Minister Prof. Ruwan Ranasinghe.

Minister Herath said that the UN Security Council was scheduled to take up this issue today. The US is one of the five members of the UN Security Council.

In terms of the UN Charter, UN members are to refrain from the “use of force” against the territorial integrity or political independence of any state. Another permanent member of the UN Security Council, France, broke ranks with the Western block to condemn US action. France unequivocally declared that the US operation was a “violation of sovereignty.

Minister Herath didn’t respond to the query whether he discussed the issue at hand with President Anura Kumara Dissanayake.

While pointing out that Sri Lanka had been subjected to foreign interventions, The Island sought the position the JVP in respect of US President Donald Trump threatening to move against Mexico, Cuba and Colombia as the party always took a strong stand against US actions. Declaring that his response would be for the government and not the JVP, Minister Herath said that there was a way to deal with situations through the UN.

Minister Herath strongly defended recently signed agreements with India and US pertaining to defence. Stressing that both agreements were beneficial, Minister Herath pointed out that they weren’t defence agreements but security cooperation arrangements.

The US and Sri Lanka signed a Defence Memorandum of Understanding (MoU) in November 2025, formalising defence cooperation under the State Partnership Programme (SPP) with the Montana National Guard. The MoU with India was signed in April, 2025. It was among seven MoUs.

Referring to devastating Cyclone Ditwah, the Minister said that India provided material support under the MoU signed in April whereas the US provided 10 helicopters to the SLAF recently.

Responding to a query on US-Sri Lanka tariff negotiations, Minister Herath said that about 95% of the negotiations have been finalised.

At the onset of the briefing, Minister Herath and Deputy Ministers Prof. Ranasinghe and Arun Hemachandra explained how the tourism sector and expatriate Sri Lanka work force contributed to the national economy.

Referring to Central Bank figures, they declared that tourism had brought in USD 3.2 bn whereas expatriate workers contributed USD 7.19 bn up to November last year. Once the Central Bank made available December figures it could reach USD 7.8 bn, they said. Tourism and expatriate work force together brought in as much as USD 11.6 bn, they declared, expressing hope 2026 would definitely be better.

Although the devastation caused by Cyclone Ditwah caused concerns that it may cause a significant drop in tourist arrivals, a steady flow of visitors paved the way for a comfortable 15% increase in arrivals by end of 2025, they said.

Minister Herath said that the government was happy that the country recorded the highest number of tourist arrivals this year.

By Shamindra Ferdinando

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Ban on foreign research vessels: FM promises decision within two months

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Foreign Minister Vijitha Herath yesterday said that the government would announce its decision on the ban on foreign research vessels entering Sri Lankan waters.

Addressing the media at the Foreign Ministry, Minister Herath, in response to a query, said that they were in the process of addressing the issue.

Former President Ranil Wickremesinghe declared a moratorium on the entry of foreign research vessels during 2004. Although the NPP government, in December, 2004, declared its position would be made known soon, the decision was not taken during last year. Wickremesinghe took that decision under intense Indian and US pressure to deny entry of Chinese research vessels (SF)

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