Sri Lanka and Japan Finalize $2.5 Billion Debt Restructuring Agreement

The deal marks Sri Lanka's first official creditor agreement, a key step in its IMF-backed economic recovery plan.

Sri Lanka has signed a $2.5 billion debt restructuring agreement with Japan, its second-largest bilateral lender, after two years of negotiations.
This is the first agreement with an official creditor under the framework of Sri Lanka's IMF-supported economic recovery plan.
Japan's concessions on the loan are part of a comprehensive debt treatment plan deemed vital for Sri Lanka's financial stabilization and development in the Indo-Pacific region.
Sri Lanka defaulted on its $46 billion external debt in April 2022 but has since made progress with an IMF bailout and austerity measures.
The government still needs to finalize debt restructuring deals with China, its largest bilateral lender, and India to fully comply with IMF program requirements.