Sri Lanka and Paris Club official creditors reach preliminary debt deal

Sri Lanka and the country’s Official Creditor Committee (OCC) co-chaired by India, Japan and France as the Chair of the Paris Club have agreed on a debt restructuring deal, a statement issued by the Paris Club Secretariat said.

“The OCC and Sri Lanka agreed on the main parameters of a debt treatment consistent with those of the Extended Fund Facility (EFF) arrangement between Sri Lanka and the IMF,” the statement said.

“This agreement will allow the IMF staff to present to the IMF Executive Board the first review of Sri Lanka’s EFF arrangement and open the way for approval of the second disbursement under the arrangement,” it added.

“The OCC stands ready and looks forward to formalizing this agreement in the coming weeks in a Memorandum of Understanding with the Sri Lankan authorities,” if further said. 

The OCC expects other bilateral creditors to consent to sharing, in a transparent manner, the information necessary for tthem to evaluate comparability of treatment regarding their own bilateral agreement. 

The Sri Lankan government in October said it reached an  agreement with the Exim Bank of China on key terms and principles for restructuring its debt worth US $ 4.2 billion. 

The OCC also expects the Sri Lankan authorities to continue to engage with their private creditors to find as soon as possible an agreement on terms at least as favourable as the terms offered by the OCC.