Speaking at the President’s Media Centre (PMC), the Minister clarified that the present government had restructured debts owed to official creditors such as Kuwait, Saudi Arabia, Iran, and Pakistan, which together account for USD 300 million or 1% of the country’s total external debts.
Prof. Fernando elaborated that bilateral debts were addressed through the Official Creditor Committee (OCC), co-chaired by France, India, and Japan, and included 17 countries, China Exim Bank, China Development Bank, and other creditors. In June 2024, the OCC agreed to restructuring terms, while China Exim Bank loans were restructured in October 2023 under the agreed framework, ensuring comparability of treatment (CoT).
On International Sovereign Bonds (ISBs), he stated that the previous government had reached an Agreement in Principle (AIP) on restructuring ISBs on September 19, 2024, just two days before the Presidential election. The current administration continued this process and successfully completed ISB restructuring on December 20, 2024.
“ISBs, valued at USD 14.2 billion, including USD 1.7 billion in past-due interest, were represented by the Ad Hoc Group (AHG) and the local banking consortium. By prioritizing timely actions, the current government demonstrated strong political commitment to economic stability,” he said, noting that international rating agencies have recognized these efforts with upgrades.
Prof. Fernando also addressed the perception of bankruptcy following the unilateral suspension of external debt servicing in April 2022, stating it resulted from policies of previous governments. He credited the current administration for laying a solid foundation for financial stability, which he predicted would reflect in economic indicators and people’s lives by the end of 2025.
“Our government has taken the steering wheel to guide the country toward economic recovery, growth, and a better future,” he concluded.
