November 29, 2023
In a significant development, the Official Creditor Committee (OCC), established in response to Sri Lanka's request for debt restructuring, has successfully reached an agreement in principle with Sri Lankan authorities. The OCC, comprising 17 countries co-chaired by India, Japan, and France (representing the Paris Club), was formed to address the economic challenges faced by Sri Lanka.
Since its establishment in May 2023, the OCC has engaged extensively with various stakeholders, including Sri Lankan authorities, the International Monetary Fund (IMF), the World Bank, and China, as well as private creditors of Sri Lanka. The committee, which includes India and Hungary in addition to Paris Club creditors, has worked collaboratively to formulate a debt treatment plan consistent with the Extended Fund Facility (EFF) arrangement between Sri Lanka and the IMF.
The agreement reached outlines the key parameters for debt restructuring, aligning with the conditions set forth in Sri Lanka's EFF arrangement with the IMF. This milestone allows the IMF staff to present the first review of Sri Lanka's EFF arrangement to the IMF Executive Board, paving the way for the approval of the second disbursement under the arrangement.
The OCC commends the Sri Lankan authorities for their steadfast efforts in implementing crucial reforms necessary for the country's return to a sustainable economic path. The committee expresses readiness to formalize the agreement through a Memorandum of Understanding with Sri Lankan authorities in the coming weeks.
Additionally, the OCC expects other bilateral creditors to provide necessary information transparently for evaluating comparability of treatment regarding their respective agreements with Sri Lanka. The committee also urges Sri Lankan authorities to continue engaging with private creditors to expedite an agreement on terms that are at least as favorable as those offered by the OCC.
These ongoing engagements aim to ensure that the overall debt treatment granted to Sri Lanka remains consistent with the parameters outlined in the IMF program.
Background Notes:
The Paris Club, established in 1956, is an informal group of official creditors working collaboratively to find coordinated and sustainable solutions to payment difficulties faced by borrower countries. The OCC includes representatives from countries with eligible claims on Sri Lanka, such as Australia, Austria, Belgium, Canada, Denmark, France, Germany, Japan, Korea, the Netherlands, Russia, Spain, Sweden, the United Kingdom, and the United States of America.
Observers at OCC meetings include representatives from the International Monetary Fund, the World Bank, China, the Asian Development Bank, Saudi Arabia, and Iran.
In a significant development, the Official Creditor Committee (OCC), established in response to Sri Lanka's request for debt restructuring, has successfully reached an agreement in principle with Sri Lankan authorities. The OCC, comprising 17 countries co-chaired by India, Japan, and France (representing the Paris Club), was formed to address the economic challenges faced by Sri Lanka.
Since its establishment in May 2023, the OCC has engaged extensively with various stakeholders, including Sri Lankan authorities, the International Monetary Fund (IMF), the World Bank, and China, as well as private creditors of Sri Lanka. The committee, which includes India and Hungary in addition to Paris Club creditors, has worked collaboratively to formulate a debt treatment plan consistent with the Extended Fund Facility (EFF) arrangement between Sri Lanka and the IMF.
The agreement reached outlines the key parameters for debt restructuring, aligning with the conditions set forth in Sri Lanka's EFF arrangement with the IMF. This milestone allows the IMF staff to present the first review of Sri Lanka's EFF arrangement to the IMF Executive Board, paving the way for the approval of the second disbursement under the arrangement.
The OCC commends the Sri Lankan authorities for their steadfast efforts in implementing crucial reforms necessary for the country's return to a sustainable economic path. The committee expresses readiness to formalize the agreement through a Memorandum of Understanding with Sri Lankan authorities in the coming weeks.
Additionally, the OCC expects other bilateral creditors to provide necessary information transparently for evaluating comparability of treatment regarding their respective agreements with Sri Lanka. The committee also urges Sri Lankan authorities to continue engaging with private creditors to expedite an agreement on terms that are at least as favorable as those offered by the OCC.
These ongoing engagements aim to ensure that the overall debt treatment granted to Sri Lanka remains consistent with the parameters outlined in the IMF program.
Background Notes:
The Paris Club, established in 1956, is an informal group of official creditors working collaboratively to find coordinated and sustainable solutions to payment difficulties faced by borrower countries. The OCC includes representatives from countries with eligible claims on Sri Lanka, such as Australia, Austria, Belgium, Canada, Denmark, France, Germany, Japan, Korea, the Netherlands, Russia, Spain, Sweden, the United Kingdom, and the United States of America.
Observers at OCC meetings include representatives from the International Monetary Fund, the World Bank, China, the Asian Development Bank, Saudi Arabia, and Iran.
