Japan will consider any request by Sri Lanka for a fresh Yen loan project including Light Rail Transit (LRT) only after careful consideration of it in consultation with the Sri Lankan government, taking into account not only their priorities, but also the progress of the existing projects, feasibility of the proposed project as well as the country’s economic and fiscal conditions, according to the Japanese Embassy in Colombo.
The embassy, in response to a question by Daily Mirror ahead of the visit of President Anura Kumara Dissanayake, said so.
Asked about the current status of the Yen loan projects, the embassy stated that the Japanese government has decided to resume disbursements to the existing 11 projects.
“Since then, three of these projects have been completed, with construction and payments finalised. As of September 2025, eight projects are still ongoing,” the embassy said.
“If we receive a request for a new yen loan project from the Government of Sri Lanka, we will carefully consider it with close consultations with the Government of Sri Lanka, taking into account not only their priorities, but also the progress of the existing projects, feasibility of the proposed project as well as the country’s economic and fiscal conditions,” the embassy added.
Japan played a key role in restructuring Sri Lanka’s foreign debt as part of a $2.9 billion bailout from the International Monetary Fund (IMF), following the worst financial crisis in the post-independence period.
Former President Gotabaya Rajapaksa unilaterally cancelled the 1.5 billion US dollar LRT (Light Rail Transit) project to be financed by Japan in 2021. The project was meant to ease congestion in the city.
After the conclusion of his visit to the United States to attend the 80th session of the United Nations General Assembly (UNGA), President Anura Kumara Dissanayake has departed for Japan.
At the invitation of the Japanese government, President Dissanayake is set to undertake an official visit to Japan from September 27 to 30. During the visit, President Dissanayake will have an audience with the Emperor of Japan.