Amid Continued Debt Crisis, Sri Lanka 'Secures' Chinese Assistance For Seaport And Airport Development

In a significant development on Wednesday (27 March), Sri Lanka's Prime Minister, Dinesh Gunawardena, announced that China has pledged to support the development of key infrastructure projects in the island nation.

Following high-level discussions with Chinese officials in Beijing, Gunawardena revealed that China, as Sri Lanka's largest bilateral creditor, has committed to aiding the restructuring of the country's external debt — an essential requirement for maintaining a crucial $2.9 billion bailout from the International Monetary Fund (IMF).

Although 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 rather than accepting significant write-offs, reported NDTV.

This comes in the wake of Sri Lanka's sovereign default on its substantial $46 billion foreign debt in 2022, which precipitated a period of economic turmoil and led to widespread protests ultimately resulting in the ousting of then-president Gotabaya Rajapaksa.

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According to Gunawardena's office, 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.

Notably, Gunawardena said that Beijing had offered "assistance to develop" Colombo International Airport and Hambantota port, without giving further details.

The development of Colombo airport, initially funded by Japan, had been stalled following Sri Lanka's debt default, making China's involvement a pivotal step forward in revitalising the project.

Meanwhile, the Hambantota port, which was leased to a Chinese state-owned firm for 99 years in 2017, has drawn attention from regional powers like India and the United States due to its strategic location in the Indian Ocean.

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