France has opened discussions with Sri Lanka to resume Sri Lanka projects that stalled during the debt crisis, while also considering new initiatives under the government’s development priorities.
France opens talks with Sri Lanka to resume stalled projects and launch new development initiatives.
Sri Lanka projects backed by France are moving back into focus after the two countries signed debt restructuring agreements in August 2025. According to officials from Agence Française de Développement (AFD), the French development agency, talks have begun with the Sri Lankan government to decide which projects will continue, which may be cancelled, and how new areas of cooperation can be launched.
Sri Lanka owed France about 426 million US dollars in bilateral loans as of March 2025, with 138 million in arrears, in addition to unpaid interest. By June, the outstanding amount had risen to 478 million dollars. Following the restructuring deal, French officials said discussions now center on re-engagement with the Sri Lankan government, public institutions, and private sector stakeholders.
Cyrille Bellier, Head of AFD’s Department for Europe, Middle East and Asia, told reporters in Paris that the talks will determine how to re-engage projects deemed priorities by Sri Lanka, while non-essential ones could be cancelled. He added that the process also involves exploring directions for future partnerships, including financing through public banks, private institutions, and AFD’s private-sector arm, Proparco, which supports small and medium businesses as well as larger firms.
AFD already has a significant footprint in Sri Lanka, with programs ranging from rural dairy development and air quality management to renewable energy projects for the Ceylon Electricity Board and geographical indicators for tea. These Sri Lanka projects reflect France’s broader development strategy, which prioritizes climate resilience, biodiversity preservation, energy transition, and sustainable development goals.
France played a key role in Sri Lanka’s debt restructuring as co-chair through the Paris Club, highlighting its strategic interest in supporting the country’s economic recovery. Philippe Orliange, AFD’s Executive Director of Operations, noted that the agency manages an active portfolio of about 50 billion euros, with one-third allocated to the Indo-Pacific region, underlining the importance of Sri Lanka within its regional agenda.
The resumption of Sri Lanka projects backed by France is expected to provide critical support for economic recovery while aligning with global climate and development priorities. Both governments view the renewed engagement as an opportunity to strengthen bilateral ties and lay the groundwork for sustainable growth.