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Viewing cable 05COLOMBO974, SRI LANKA ACCEPTS US DEBT RELIEF OFFER

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Reference ID Created Released Classification Origin
05COLOMBO974 2005-06-01 09:46 2011-08-25 00:00 UNCLASSIFIED Embassy Colombo
This record is a partial extract of the original cable. The full text of the original cable is not available.

010946Z Jun 05
UNCLAS COLOMBO 000974 
 
SIPDIS 
 
TREASURY FOR C. CARNES, DEPT FOR SA/INS J. BRENNIG, MANILA 
PLEASE PASS USADB 
 
E.O. 12958:  N/A 
TAGS: EAID EFIN ECON CE
SUBJECT:  SRI LANKA ACCEPTS US DEBT RELIEF OFFER 
 
 
1.  This is an action request, please see para 3.  Post has 
received a letter from Mr. J.H.J. Jayamaha, Additional 
Director General for External Resources at the Sri Lankan 
Finance Ministry, accepting the USG offer for debt relief, 
asking us to conclude a bilateral agreement, providing a 
copy of the "draft" MOU they intend to sign with the Paris 
Club and requesting an adjustment to the USG cost of debt 
deferral, based on payments made to date. 
 
2.  Post will fax a copy of the letter and attached draft 
MOU to SA/INS and EB/OMA.  We would appreciate SA and EB 
assistance in distributing to other relevant agencies. 
 
3.  Post understands that the GSL needs to conclude the MOU 
with Paris Club prior to negotiation of a bilateral 
agreement.  We intend to tell the GSL that that the Paris 
Club MOU needs to be concluded immediately, in order to move 
ahead with negotiation of the bilateral agreement.  Post 
would appreciate any other guidance relevant to moving 
forward with this request.  Further, Post would appreciate 
guidance on responding to the adjusted budget cost of debt 
deferral, as requested in the letter. 
 
4.  Begin text of letter: 
 
Dear Mr. Thompson: 
 
Debt Relief from the US Government 
 
I wish to refer you to the meeting you had with Mr. R.A. 
Jayatissa, Asst. Governor, Central Bank of Sri Lanka on the 
Debt Relief offered by the US Government and the note 
submitted to Mr. Jayatissa on this matter. 
 
I am pleased to inform that the Debt Relief offered by the 
US Government is acceptable to the Ministry of Finance and 
Planning.  You may please proceed to conclude a bilateral 
Agreement for the implementation of the debt relief.  A 
draft of the Memorandum of Understanding that we intend to 
sign with the Paris Club is enclosed for your information. 
 
Since the Government of Sri Lanka has already paid US$ 8.78 
million the balance debt payment in 2005 would be US$ 35.02 
million.  Accordingly, the US budget cost of debt deferral 
has to be adjusted.  Please inform me the new account. 
 
Yours sincerely, 
 
J.H.J. Jayamaha 
Addl. Director General 
For DG/ERD 
 
End text of letter. 
 
 
LUNSTEAD