Indian loans worth more than $1 bln to Sri Lanka to undergo restructuring

12-Aug-2023

More than $1 billion debt owed to India by Sri Lanka will undergo restructuring as part of the International Monetary Fund-led debt restructuring programme for the crisis hit South Asian country.

More than $1 billion debt owed to India by Sri Lanka will undergo restructuring as part of the International Monetary Fund-led debt restructuring programme for the crisis hit South Asian country, Indian media reported on Thursday.

The debt is part of the Line of Credit that the Government of India has extended to Sri Lanka over the years for undertaking various projects, primarily related to infrastructure building associated with roads, energy, water, housing projects, among others. India’ current exposure to Sri Lanka is about $3 billion.

“…IMF is trying to come up with a resolution plan, where there may be some kind of haircut for the (international) lenders. We are not sure what kind of it is there, but we believe it is going to be common across the board,” said N. Ramesh, Deputy Managing Director, EXIM Bank of India to ET Infra.

“It’s about more than a billion (dollars),” he said on the amount that Sri Lanka has utilized from the several Line of Credit extended by India and which will undergo some form of restructuring.