Japan resumes funding for Sri Lanka development projects

The Japanese government officially announced today (July 24) the release of funds for the resumption of development projects in Sri Lanka.

A special press conference was held at the Ministry of Finance Auditorium to mark this occasion.

During the event, Dr. TANAKA Akihiko, President of the Japan International Cooperation Agency (JICA), handed over the official announcement of the fund release to Mr. K.M. Mahinda Siriwardana, Secretary to the Treasury and the Ministry of Finance, Economic Stabilization, and National Policies. Ms. IDE Yuri, Senior Representative of the JICA Sri Lanka Office, made the presentation on behalf of Dr. Tanaka.

Treasury Secretary Mahinda Siriwardana expressed sincere gratitude on behalf of the Government of Sri Lanka to the Government of Japan for their crucial role in the debt treatment process and for refinancing ongoing infrastructure development projects.

The Ministry of Finance released a statement highlighting the significant milestone achieved in Sri Lanka’s debt treatment process. The final agreement on debt treatment with members of the Official Creditor Committee (OCC) of Sri Lanka’s bilateral creditors was reached on June 26, 2024. Japan, a longstanding development partner, played a vital role in initiating and supporting the coordination platform with Sri Lanka’s bilateral creditors.

The statement further emphasized the enhanced confidence in Sri Lanka’s economic stability and debt sustainability due to the conclusion of the agreement with the OCC, progress in restructuring debt with other creditors, and the government’s commitment to implementing comprehensive macroeconomic reforms supported by the International Monetary Fund and other multilateral partners.

Japan’s decision to resume disbursement for the Japan-funded project portfolio signals confidence in Sri Lanka’s economic reform program and renewed optimism for the country’s future prospects. This decision will revive suspended projects, including the Bandaranaike International Airport Development Project, utility projects, health sector improvements, and rural development initiatives, paving the way for economic and social improvement.

The Bandaranaike International Airport Development Project, in particular, is seen as critical for enhancing Sri Lanka’s connectivity infrastructure, which will boost key sectors such as tourism, trade, and investment.