Japan to restart stalled development projects funded by Yen loans
Japan will restart their stalled development projects funded by Yen loans in Sri Lanka as soon as the Official Creditor Committee (OCC) agreements are signed next month, said Minister/Deputy Head of Mission, Katsuki Kotaro.
The Government is to sign a MoU with the OCC of the Paris Club to restructure the country’s debt before the completion of the IMF Executive Board review of its Extended Fund Facility Arrangement next month. He said that the interest rate of these Yen funded projects is less than 5%.
Speaking at the Sri Lanka Japan Chamber organized event in Colombo yesterday he said that these include Bandaranaike International Airport development project, digitalization of Sri Lanka television process and water projects in both Kandy and Anuradhapura. He said that all projects will restart once the OCC agreements have been signed and they would not wait until the entire debt restructuring process is completed. Kataro said that they are very pleased with the robust manner in which Sri Lanka bounced back from its worst economic crisis converting a negative 7% growth rate to a positive growth in just 18 months.
“We also see that the Sri Lanka economy will grow at around 3% in 2024.” He said the main reason for this bounce back is the reform agenda adopted by the Sri Lanka government on IMF guidelines and future leaders too will have to follow this positive path.
He also said that Sri Lanka’s Foreign Reserves too have increased to around USD 6 billion and the country now has (minus Swaps) sufficient for 3.5 months of imports which aligns with global norms.
“Sri Lanka is now in a position to import motor vehicles but it should be done with caution.”
He also said that Sri Lanka should pay more emphasis on digitalisation. “India had made great strides in the economic development due to investing heavily on the digitalisation process.”
Kotaro also opined that Sri Lanka should concentrate more on tourism, agricultural and aviation development. These sectors along with the development of the mineral sector have great potential for future Sri Lanka.
“Due to the top geographical location of Sri Lanka the country should have more focus development in the ports all around Sri Lanka as most of the international ships have to pass Sri Lanka in their routes and this factor too should be exploited.”
While trying to achieve 70% energy by renewable sources Sri Lanka should also try to achieve their carbon neutral goals by 2040.
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