China is Sri Lanka’s largest bilateral lender owning 52% of $40 billion external debt
Colombo: Sri Lankan Prime Minister Dinesh Gunawardena has welcomed direct private investments from China and greater Chinese participation in sectors like agriculture, renewable energy, IT and education.
The issue of direct private investment came during a meeting of Prime Minister Gunawardena and Chinese Ambassador to Sri Lanka Qi Zhenhong when they discussed ways for the early implementation of the agreements and Memorandums of Understanding (MoUs) reached between the two countries during the former’s official visit to Beijing in March.
A statement from the Prime Minister’s Media Office said Gunawardena and Qi met at the Temple Trees, the official residence of the Sri Lankan prime minister.
“During the talks with Ambassador Qi Zhenhong, the Prime Minister stated that in addition to the implementation of the MoUs, Sri Lanka would also welcome direct private investments from China as well as investments in agriculture, renewable energy, IT, education and water supply sectors to provide long term solutions to economic issues,” the statement said.
“Ambassador Qi said he was pleased to see the resilience of Sri Lanka to overcome difficulties and assured China’s continuous support to Sri Lanka’s current efforts at debt restructuring and meeting economic challenges,” it added.
Earlier on March 30, a joint statement by the two countries as Gunawardena wrapped up his official weeklong visit to China, said that China will play a “positive role” in easing the financial difficulties of cash-strapped Sri Lanka and its bid to achieve “debt sustainability” while Colombo will accelerate the formulation of a Belt and Road Initiative (BRI) cooperation plan to advance Beijing’s projects in the island nation.
On March 27, China and Sri Lanka had signed nine agreements as Gunawardena met Chinese President Xi Jinping and Premier Li Qiang in Beijing amid Colombo’s efforts to restructure its to revive its bankrupt economy.
China is Sri Lanka’s largest bilateral lender owning 52 per cent of the $40 billion external debt when Sri Lanka announced its first sovereign default in 2022.
In March, the International Monetary Fund (IMF) had said it has reached a staff-level agreement with Sri Lanka for the next phase that would enable it access to $337 million from the nearly $3 billion bailout approved in 2023 for the island nation.
Two tranches of $330 million each were released in March and December 2023 even as the global lender has praised Colombo for its macroeconomic policy reforms, which it said, “are starting to bear fruit.”
