Sri Lanka is working towards finalising the Agreements in Principle (AIP) that have been reached with the Official Creditor Committee (OCC) and the Export-Import Bank of China (China Exim Bank), while a six-year moratorium on a debt treatment plan with the OCC is under discussion with no final terms reached yet, The Sunday Morning learns. 

The International Monetary Fund (IMF) last week said that while Sri Lanka’s Agreements in Principle with the OCC and the China Exim Bank were “important milestones,” a critical next step was to finalise those agreements with the official creditors. 

Speaking to The Sunday Morning, Treasury Secretary Mahinda Siriwardana said that the Government was “working towards” finalising the said agreements, although he could not specify a timeline. 

Meanwhile, foreign media reported that a six-year moratorium was likely to be granted by the OCC. 

An official close to the matter told The Sunday Morning that this time period was still under discussion, with no final terms reached yet. 

“Sri Lanka’s Agreements in Principle with the OCC and China Exim Bank on debt treatments consistent with programme parameters were important milestones in putting Sri Lanka’s debt on the path towards sustainability. The critical next steps are to finalise the agreements with the official creditors and reach Agreements in Principle with the main external private creditors in line with programme parameters in a timely manner. This should help restore Sri Lanka’s debt sustainability over the medium term,” IMF Senior Mission Chief for Sri Lanka Peter Breuer said on Thursday (21). 

The IMF completed its second review and reached a Staff-Level Agreement (SLA) with Sri Lanka this week which, once approved by the IMF Executive Board, will provide the country with access to about $ 337 million.

However, this is contingent on the implementation of prior actions by the Sri Lankan authorities and completion of the financing assurances review.

“The completion of the financing assurances review will focus on confirming multilateral partners’ committed financing contributions and whether adequate progress has been made with the debt restructuring to give confidence that the restructuring will be concluded in a timely manner and in line with the programme’s debt targets,” said Breuer. 

The country is yet to reach Agreements in Principle with its private creditors. “We are hoping for swift progress on these outstanding items,” Breuer said.