France reaffirms its support to Sri Lanka on economic recovery

France has reaffirmed its support for Sri Lanka's economic recovery by signing a bilateral agreement to reschedule a debt stock of EUR 390 million until 2042.

The two countries signed a bilateral agreement to implement the recommendations of the Memorandum of Understanding on the debt restructuring of Sri Lanka, concluded on June 26th 2024 with the official creditors committee − co-chaired by France, India and Japan and composed of these countries with the Paris Club creditors.

The bilateral agreement reschedules a debt stock of EUR 390 million until 2042, with a five-year grace period and a cap on original interest rates.

The bilateral agreement signed on June 16 by Mr. William Roos, Assistant Secretary for Multilateral Affairs, Trade and Development at the French Treasury, and Mr. Mahinda Siriwardana, Secretary to the Treasury of the Ministry of Finance, Planning and Economic Development, is a key step in France's support for Sri Lanka's economic recovery.

The agreement was signed in presence of the Ambassador of France to Sri Lanka Rémi Lambert and Sri Lankan authorities including Deputy Minister Dr Harshana Suriyapperuma and Governor of Central Bank of Sri Lanka Dr Nandalal Weerasinghe

“This agreement aims to restore Sri Lanka’s debt sustainability, based on a coordinated approach between the country's main official creditors and in compliance with the principle of comparability of treatment for third-party creditors in the scope of the restructuring. It also supports the implementation of the International Monetary Fund's multi-year financing program amounting to EUR 2.8 billion,” the Embassy of France said.

The signing was an opportunity for France to reaffirm its support for Sri Lanka's economic recovery, the press release said.