Sri Lanka 'secures' Chinese assistance for seaport and airport development amid continued debt crisis
- In Reports
- 06:13 PM, Mar 27, 2024
- Myind Staff
Sri Lanka's Prime Minister, Dinesh Gunawardena, made a significant announcement stating that China has pledged to support the development of key infrastructure projects in the island nation.
After engaging in high-level discussions with Chinese officials in Beijing, Gunawardena disclosed that China, as Sri Lanka's largest bilateral creditor, has committed to assisting in the restructuring of the country's external debt. This support is deemed essential for securing a crucial $2.9 billion bailout from the International Monetary Fund (IMF).
NDTV reported that while specifics regarding Beijing's stance on debt restructuring remain undisclosed, Sri Lankan authorities have indicated that China is inclined towards extending loan tenures and adjusting interest rates instead of accepting significant write-offs.
In 2022, Sri Lanka's sovereign default on its substantial $46 billion foreign debt triggered a period of economic turmoil and sparked widespread protests. Ultimately, these protests led to the ousting of then-president Gotabaya Rajapaksa.
Gunawardena's office reported that Premier Li Qiang of China has assured continued assistance in Sri Lanka's debt restructuring efforts and pledged support for the nation's economic development.
Gunawardena highlighted that Beijing had offered assistance to develop Colombo International Airport and Hambantota Port, refraining from providing further details.
Sri Lanka's debt default had halted the development of Colombo airport, which was originally funded by Japan. China's involvement in revitalising the project marks a pivotal step forward in its progress.
Meanwhile, the Hambantota Port, leased to a Chinese state-owned firm for 99 years in 2017, has attracted attention from regional powers such as India and the United States owing to its strategic location in the Indian Ocean.
Image source: Hindustan Times
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