Sri Lanka seals deal with Japan to restructure $2.5bn in debt

Pact will allow two countries to restart projects, including airport expansion

Sri Lanka and Japan have signed a deal on March 7 in Colombo to restructure $2.5 billion in debt owed by the South Asian country, which officials hope will help it get back on its feet economically. © Reuters

March 7, 2025 21:39 JST

COLOMBO (Reuters) -- Sri Lanka and Japan signed agreements on Friday to restructure $2.5 billion worth of debt, completing two years of talks that will assist the island nation in getting back on its feet after a severe financial crisis.

The agreements will allow the two countries to restart projects, including an expansion of Sri Lanka's main airport, which were suspended after the island nation announced in April 2022 that it was defaulting on its foreign debt.