The Paris Club of creditors has given financing assurances to support the IMF’s approval of an extended fund facility for Sri Lanka, according to Reuters.
The assurances are crucial to unlocking a USD 2.9 billion deal from the IMF, which is still pending executive board approval.
"Paris Club members as well as Hungary, Saudi Arabia and India continue to look forward to working together along with all bilateral creditors and to engage with other key stakeholders in order to proceed with a comparable debt restructuring as soon as possible," the informal group of creditors said in a statement.
The statement said Paris Club members, jointly with Hungary, expressed their full commitment to negotiate with Sri Lanka terms of a restructuring, while Saudi Arabia supported the process but "acknowledged the importance to offer financing assurances in the near future."
To unlock the IMF's cash disbursements, the Colombo government first needs to secure financing assurances from key bilateral lenders such as Japan, India and China.
While India committed to helping ease the debt burden of its neighbour as part of the IMF programme, China's EximBank only offered a two-year moratorium.
"Members further expressed appreciation for the specific and credible financing assurances issued by India on Jan. 16, 2023 and its coordination with the Paris Club," the group's statement added.
"The Paris Club members as well as Hungary and Saudi Arabia urged other official bilateral creditors, including China, to do the same in line with IMF program parameters as soon as possible."