Sri Lanka and a group of its creditors are in final negotiations to suspend debt repayments until 2028, Nikkei has learned, as country creditors including Japan seek to prevent China’s influence from expanding in the debt-ridden island.

“Negotiations [with the creditor nations] have concluded. We are hoping that it [a detailed announcement] will take place in the next few weeks,” Sagala Ratnayaka, Sri Lanka’s national security adviser to the president, told Nikkei in a recent interview. The repayment period will be 15 years, from 2028 to 2042, with the interest rate newly set at around 2%. He said that there will be no further debt reduction, despite a request by the island nation.

Sri Lanka in April 2022 announced a temporary suspension of public external debt payments, in effect putting the country into default. A meeting of creditor nations was set up in April 2023. Japan, which is the largest creditor country after China, is serving as the chair in the talks along with India and France.

Sri Lanka and the creditor nations have reached a basic agreement on a repayment moratorium and a reduction in interest. The provision of financial assistance from the International Monetary Fund, which was conditional on debt restructuring agreements being struck with major creditor countries, has also begun.

China, the biggest creditor, has only joined the meeting as an observer. However, the restructuring of debt from China via loans of the Export-Import Bank of China would be “similar,” Ratnayaka said. “We have a saying which means ‘everyone will be treated equally’,” implying that the terms of debt repayment to China would be similar to those agreed at the creditors’ meeting.

As of the end of 2023, Sri Lanka’s outstanding debt was $37.3 billion, of which China accounted for $4.7 billion.

Sri Lanka handed over control of its southern Hambantota Port to China in 2017. This was seen as a typical example of a “debt trap,” where infrastructure rights are taken away amid delayed debt repayments. Some creditors, including Japan and India, are wary of China expanding its influence into the Indo-Pacific, with Sri Lanka as its base.

Ratnayaka explained that “this is all purely commercial. There is nothing military [about the port agreement]. Sri Lanka is open to investment and we don’t pick and choose on the basis of what country, unless it affects national security.” He added, “But in the north and areas which would affect the security of India, we are conscious.”

The Election Commission formally announced that the 2024 Presidential election will be held on a day between September 17 and October 16.

The Colombo Chief Magistrate’s Court today issued an order preventing State Minister Diana Gamage from leaving the country. Colombo Chief Magistrate Thilina Gamage made this order in connection with a magisterial inquiry filed against her for allegedly committing offences under the Immigrants and Emigrants Act.

A total of 37 new liquor permits (FL4) were issued by the Excise Department during the first four months of this year, State Minister of Finance Ranjith Siyambalapitiya said today. He told Parliament that 16 out of the 37 were issued to super markets.

Claiming that Opposition Leader Sajith Premadasa must take full responsibility over the issues faced by the country, President Ranil Wickremesinghe said today that if Premadasa had taken up the premiership on April 10, there would have been no issues.

There is no legal barrier for the non-citizens to register a political party, Former Chairman of Elections Commission Mahinda Deshapriya said yesterday.

It has been reported that a group in the government ranks is attempting to file a case with the Supreme Court over the legitimacy of the main opposition party – Samagi Jana Balawegaya (SJB).

Leg-spinner Viyaskanth Vijayakanth was handed his Indian Premier League debut today after he was named in the Sunrisers Hyderabad playing XI against the Lucknow Super Giants. Vijayakanth was drafted into the Sunrisers squad after Sri Lankan all-rounder Wanindu Hasaranga was ruled out of the tournament due to injury.

The Supreme Court in another landmark judgment today held that State Minister Diana Gamage is disqualified to be a Member of Parliament and is thus not entitled to hold office as a Member of Parliament, as she was not a citizen of Sri Lanka.

Secretary to the Ministry of Public Security along with Controller General of the Department of Immigration and Emigration have been summoned before the Committee on Public Finance tomorrow, CoPF Chairman Dr. Harsha De Silva said today.

The Samagi Jana Balawegaya (SJB) will hold a discussion shortly to decide on who will fill the national list slot that has fallen vacant as a result of the Supreme Court decision that Diana Gamage cannot function as an MP as she is not a citizen of Sri Lanka, party General Secretary Ranjith Madduma Bandara said today.

Sri Lanka Podujana Peramuna (SLPP) founder Basil Rajapaksa reasserted yesterday that his party still believes the general election should precede the presidential elections but President Ranil Wickremesinghe has a contrasting stand, according to an informed source of the party.

President Ranil Wickremesinghe stressed that the enhancement of the rural economy pivots on agricultural advancement. He highlighted the pivotal role of dedicated government officials at the grassroots level in ensuring the success of various government initiatives aimed at rural development, notably the agricultural modernization program.

A deal struck by Sri Lanka with IVS-GBS-VFS Global, a private contractor, is worth 840 million dollars over its 12-year lifetime, opposition legislator S M Marikkar said in parliament. The firm was charging 18.5 dollars per visa and a 5 to 7 dollar ‘convenience fee’ on top of the government visa fee from tourists trying to enter Sri Lanka.

Sri Lanka’s Tourism Minister Harin Fernando said he has objected to fees charged from foreign tourists by VFS Global, a private company, though he has not resigned from cabinet.

Sri Lanka’s Public Security Minister Tiran Alles who is also in charge of visa issuance under the Department of Immigration and Emigration defended the newly appointed visa facilitating agency VFS-led consortium, new visa system, and accused sabotage attempts by a few handful immigration officials for a recent controversy that has gone viral in social media.

A revision application filed by Justice Minister Wijeyadasa Rajapakshe challenging the legality of the enjoining order issued by the Colombo District Court preventing him from functioning as the acting chairman of the Sri Lanka Freedom Party (SLFP) was today dismissed by the Court of Appeal.

Indo-Pacific Regional Director of the UK Foreign, Commonwealth and Development Office Ben Mellor met NPP leader Anura Kumara Dissanayake at the JVP Head Office this afternoon.

Chief Opposition Whip MP Lakshman Kiriella raised concerns in Parliament today over the newly introduced visa issuance system at the Katunayake Airport, claiming that the Parliament was not informed of the decision on the charges of global visa processing service, VFS Global.

Sri Lanka tourism witnessed a drop in momentum in April with the number of international visitors falling below the 200,000 mark for the first time this year.

Uncertainty looms over the relaunch of the Japan -financed light rail project (LRT) even after the country’s debt restructuring process is concluded since Japan has decided not to discuss it , according to an official of the Japanese government.