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Sri Lanka PM says China to develop strategic Hambantota port, Colombo airport
Sri Lanka’s prime minister said on Wednesday that China has pledged to develop the island nation’s strategic deep seaport and the capital’s airport after talks with his counterpart in Beijing.
Prime Minister Dinesh Gunawardena said China – the island’s biggest bilateral creditor – would “assist” Sri Lanka’s restructuring of external debt, a key condition to maintaining a US$2.9 billion IMF bailout.
Beijing’s position on debt restructuring has not been made public, but Sri Lankan officials have said China was reluctant to take a haircut on its loans but could extend the tenure and adjust interest rates.
Sri Lanka in 2022 ran out of foreign exchange to finance essential imports and declared a sovereign default on its US$46 billion foreign debt.
Months of protests forced then-president Gotabaya Rajapaksa out of office.
Are China-backed mega projects causing Sri Lanka to face ‘Chinese debt trap’?
Are China-backed mega projects causing Sri Lanka to face ‘Chinese debt trap’?
Gunawardena’s office said Premier Li Qiang had promised China would “assist Sri Lanka’s debt restructuring process continuously and help Sri Lanka to develop its economy”.