India will collaborate with Sri Lanka on debt treatment: Nirmala Sitharaman

India stands by Sri Lanka in economic crisis, Sitharaman and Wickremesinghe discuss debt treatment, cooperation in inter-grid connectivity, aviation, power projects, oil exploration. India provides $4B assistance, virtually launch foundation stone laying ceremony for 10,000 houses, 12th round of ETCA negotiations.

India will continue collaborating with Sri Lanka on debt treatment while the island nation attempts to emerge out of last year’s grave economic crisis, Finance Minister Nirmala Sitharaman told President Ranil Wickremesinghe.

Sri Lanka must bring its major creditors including China, India, and Japan, on board for a debt treatment plan agreeable to all, in order to unlock the second tranche of the International Monetary Fund’s (IMF) Extended Fund Facility (EFF).

On October 19, Sri Lanka reached a staff-level agreement with the IMF on economic policies to conclude the first review of the 48-month EFF-supported programme of the Fund. Following approval from the IMF Management and Executive Board — which the Fund has said will depend on the “critical step” of Colombo reaching an agreement with its official creditors — Colombo will have access to $330 million.

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Further, in her discussion with the Sri Lankan President, Ms. Sitharaman discussed cooperation in inter-grid connectivity, aviation, power projects, oil exploration in the northern town of Mannar, an official statement said. The Union Finance Minister arrived in Sri Lanka on November 1, on a three-day visit. She called on senior Buddhist monks in the central Kandy district, visited Trincomalee and Jaffna in the island’s north and east. While no new agreements were inked during the visit, some previously-discussed projects were firmed up.

During the meeting held on Thursday night, the Union Finance Minister and Mr. Wickremesinghe witnessed the exchange of a (revised) Memorandum of Understanding on $15 million grant assistance from India for the promotion of Buddhist ties between the countries, with $10 million out of the amount funding solar electrification of religious places.

Earlier on Thursday, President Wickremesinghe thanked Prime Minister Narendra Modi and Ms. Sitharaman for the nearly $4 billion Indian assistance to Sri Lanka, during the country’s painful economic crash. “If we are stable today, it is because of the assistance,” Mr Wickremesinghe said, while speaking at the ‘Naam 200’ event, held to mark two centuries since the arrival of Sri Lanka’s Malaiyaha Tamils.