Sri Lanka signed a deal with Japan Friday to restructure $2.5 billion in loans, marking the first agreement with bilateral creditors who had pledged debt relief to the cash-strapped nation last year.
Japan said it was granting concessions on a 369.45 billion yen ($2.5 billion) loan under a comprehensive debt treatment plan, which the International Monetary Fund considers essential for Sri Lanka鈥檚 economic recovery.
鈥楾he development of Sri Lanka, which is located at a strategic point in the Indian Ocean, is essential for the stability and prosperity of the entire Indo-Pacific region,鈥� the Japanese foreign ministry said in a statement.
鈥楯apan intends to further contribute to the sustainable development of Sri Lanka.鈥�
Colombo鈥檚 finance ministry said Tokyo had played a 鈥榩ivotal role鈥� in helping Sri Lanka restructure its debt.
鈥業ts leadership, commitment, and constructive engagement have been instrumental in helping Sri Lanka navigate the challenges of economic recovery,鈥� the ministry said in a statement.
Sri Lanka announced last June that it had reached an understanding with all its bilateral lenders to delay repayments until 2028.
