BEIJING: Sri Lanka’s Prime Minister Dinesh Gunawardena said on Wednesday that China has pledged to develop the island country’s strategic deep sea port and Colombo’s airport after meeting with his counterpart in Beijing.
He said China — the island’s biggest bilateral creditor — would help Sri Lanka’s restructuring of external debt, a key condition to maintaining a 2.9 billion dollars IMF bailout.
China’s position on debt restructuring has not been made public, but officials in Colombo have said Beijing 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 46 billion dollars foreign debt.
Months of demonstrations forced then-president Gotabaya Rajapaksa to quit.
Gunawardena’s office said that Premier Li Keqiang had promised that Beijing would continue to help with Sri Lanka’s debt restructuring process and assist in developing its economy.
China’s help
Gunawardena said China had offered help to develop Colombo International Airport and Hambantota port, the statement added, without providing further details.
A Japanese-funded expansion of Colombo airport had been on hold since the island’s sovereign debt default.
The southern sea port of Hambantota was handed to a state-owned company of China in 2017 on a 99-year lease for 1.12 billion dollars, sparking security concerns in China’s regional rival India.
