The World Bank yesterday signed a US$ 55 million loan agreement with Sri Lanka for the Strategic Cities Development Project to improve urban services, preserve cultural and environment assets, and improve livability in Jaffna, adding the city to an existing project to develop Galle and Kandy.

Secretary to the Treasury, Ministry of Finance Dr. R.H.S. Samaratunga and World Bank Country Director for Sri Lanka and the Maldives Françoise Clottes signed the credit agreement for the project today at the Ministry.

The credit will add development of rapidly urbanising Jaffna to the existing Strategic Cities Development Project (SCDP), which is supported by the World Bank and was originally approved in 2014.

“Well planned cities can be centers of innovation and job creation as experienced in many parts of the world and this is an opportunity for Sri Lanka to connect people to prosperity,” said Clottes. “There is substantial potential for economic growth in Jaffna, now that peace has returned. An improved urban environment is a favorable habitat for the developing enterprises that one day will become the engines of growth.”

A recent World Bank study, “Sri Lanka: a Systematic Country Diagnostic (SCD)”, identifies Jaffna as a rapidly growing, single-city agglomeration in the Northern Province of Sri Lanka. In the post-war era, the city has seen rapid growth and urban expansion and there are significant demands for improved municipal services. As communicated during recent consultations, the people of Jaffna see a priority in improving city functions and livability while preserving cultural heritage.

Guided by consultations with Jaffna’s citizens, the project will attempt to improve the road network and rehabilitate the drainage system while preserving the city’s ponds, which have played an important role in flood management and which could be key to climate change adaptation. In addition, the project aims to preserve cultural heritage assets such as public spaces and parks as well as encouraging cycling.

“Building trust among citizens and service providers is a challenge and an outcome we hope to achieve through the additional finance support to Jaffna through this project,” said World Bank Senior Urban Development Specialist and Task Team Leader of the project, Zhiyu Jerry Chen. “A City Stakeholder forum will be used under this project for improved and continued citizen engagement to closely collaborate with the service providers in ensuring the project investments are put to profitable use for the people of Jaffna,” he added.

The credit for this project is provided by the International Development Association (IDA), the World Bank’s grant and low interest arm, with a maturity of 25 years that includes a grace period of 5 years. The Ministry of Megapolis and Western Development is the lead responsible agency for the implementation of this project with active participation from Jaffna Municipal Council and other implementation partner agencies.

Finance Minister Ravi Karunanayake with outgoing World Bank Country Director Francoise Clottes and new Country Director Dr. Idah Pswarayi-Riddihough

World Bank pledges continued support to Sri Lanka

The World Bank reiterated that it is prepared to extend its full assistance towards Sri Lanka when its new Country Director Dr. Idah Pswarayi-Riddihough met with Finance Minister Ravi Karunanayake yesterday. Dr. Riddihough stated that Sri Lanka is facing economic challenges successfully and marching forward effectively.

Dr. Idah Pswarayi-Riddihough is a Zimbabwean national. She joined the World Bank in 1995.  She holds a Ph.D degree in natural resources/forestry from Oxford University and has served as Director of Operational Services and Quality in the South Asian Region.

Dr. Riddihough is scheduled to assume duties in the month of August 2016.

Serving country director of World Bank Francoise Clottes and Secretary of the Finance Ministry Dr. R.H.S. Samaratunga also participated in the meeting.

The total World Bank assistance provided for city development activities in Sri Lanka is $202 million.  Earlier $147 million was provided for Kandy and Galle development activities under the Strategic Cities Development project. This loan has been granted at a very low interest rate under a long period of repayment.

The World Bank has also granted $155 million for development activities in Sri Lanka during the year 2015.  In addition, World Bank has pledged to grant additional $233 million to Sri Lanka for development activities within the next few years.