Japan has assured to play a “constructive role” with other creditor countries, including India and China, to restructure Sri Lanka debts in the wake of the worst-ever financial crisis.
Foreign Minister Yoshimasa Hayashi made the commitment during a meeting with Sri Lankan President Ranil Wickremesinghe, who is in Japan to attend the state funeral of late Prime Minister Shinzo Abe.
“During the meeting, Foreign Minister Hayashi welcomed Sri Lanka’s progress with the IMF and expressed his country’s willingness to take a leading role in Sri Lanka’s creditor talks,” President Media Division said in a statement.
Facing the dollar crunch and skyrocketing inflation, Sri Lanka is awaiting an International Monetary Fund (IMF) bailout around $2.9 billion, but the Indian Ocean Island first has to strike a deal with creditors to secure the package.
Japan, one of the main creditors, is to help restructure about $30 billion of Sri Lanka’s foreign debt as a means to come out of the economic crisis.
Sri Lanka owes Japan around $3.5 billion of total bilateral debt of about $10 billion.
Japan said that it would stand by Sri Lanka in support of the debt restructuring negotiation process in order to reach the final agreement with the IMF.
“Japan intends to play a constructive role with other creditor countries, including China and India,” Japanese Ambassador to Sri Lanka Hideaki Mizukoshi told the media.
Referring to the cancellation and suspension of several Japanese Investment project, including a $1.5 billion Tokyo-funded light rail project for Colombo, President Wickremesinghe has expressed regret over the breakdown of ties between the two nations.
Wickremesinghe stated that he was keen to restart those projects.
“The President also indicated that the Government was interested in Japan investing in Sri Lanka’s renewable energy projects. Foreign Minister Hayashi explained that Japan had increased its commitment to renewable energy and would be willing to explore future investment opportunities in Sri Lanka,” the Media Division statement said.
The President’s Office also stated that Wickremesinghe who met Singapore’s Prime Minister Lee Hsien Loong in Tokyo on Tuesday said that Colombo was ready to implement free trade agreement with Singapore.
Prime Minister Lee Hsien Loong welcomed the news and stated that Singapore was looking forward to investing in Sri Lanka once again.