China To Develop Strategic Deep Sea Port, Airport In Sri Lanka

Sri Lanka in 2022 ran out of foreign exchange to finance essential imports and declared a sovereign default on its $46 billion foreign debt.

Sri Lanka's prime minister said Wednesday that China has pledged to develop the island nation's strategic deep sea port and the capital's airport after talks with his counterpart in Beijing.

Prime Minister Dinesh Gunawardena said China -- the island's biggest bilateral creditor -- would "assist" Sri Lanka's restructuring of external debt, a key condition to maintaining a $2.9 billion IMF bailout.

Beijing's position on debt restructuring has not been made public, but Sri Lankan officials have said China was reluctant to take a haircut on its loans but could extend the tenure and adjust interest rates.