Sri Lankan authorities formally presented on Tuesday a request for debt treatment in the first meeting of the official bilateral creditors committee, the Paris Club said in a statement.

The committee, co-chaired by India, Japan and France, consists of 17 members and includes Paris Club creditors as well as other official bilateral creditors.

Paris Club members with no claims on Sri Lanka as well as China, Saudi Arabia and Iran were observers to the meeting, according to the statement.

The meeting, within a new framework launched in Washington D.C. in April that creditors hope will serve as a model to resolve the debt difficulties of middle-income economies, was held online.

Japan, which initiated the launch together with India and France, had invited all bilateral creditors, including the largest, China.

Last month, France, India and Japan unveiled a common platform for talks among bilateral creditors to co-ordinate restructuring of Sri Lanka’s debt.

Sri Lanka owes USD 7.1 billion to bilateral creditors, government data show, with USD 3 billion owed to China, followed by USD 2.4 billion to the Paris Club of creditor nations and USD 1.6 billion to India.

The government also needs to renegotiate more than USD 12 billion of debt in eurobonds with overseas private creditors, and USD 2.7 billion of other commercial loans.

Sri Lanka has kicked off talks to rework part of its domestic debt and aims to finalise a deal by May.


Source - Reuters