Borrowing binge

Five projects totalling more than US$ 550 from four funders approved by Cabinet 

By Uditha Jayasinghe

Cabinet approval has been given for funds from a string of monetary organisations including the China Development Bank to the Sri Lankan Government totalling US$ 550 million, which will be funnelled into infrastructure projects countrywide.

Media Minister Keheliya Rambukwella told the weekly Cabinet press briefing that US$ 500 million was being given by the China Development Bank, US$ 17.5 million from Asian Development Bank (ADB), US$ 38 million from the International Development Association (IDA), Rs. 468 million from the Japanese government and Rs. 1.8 billion from Japan International Cooperation Agency (JICA) for several infrastructure projects countrywide.

“The US$ 500 million loan facility from China is to finance priority road projects. The intention of this programme is to improve and rehabilitate priority roads countrywide connecting all electorates.

This project is already underway now and the China Development Bank Corporation (CDBC) has agreed to provide US$ 500 million to finance this project,” he said.

This will contribute to lower transportation cost and improved the integration of all parts of the country, thus increasing the economic activities and productivity as well as providing employment opportunities to the residents of the area, the Cabinet paper disclosed.

The remainder of the funds will predominantly be used for facilitating internally displaced people in the north and east. The ADB has agreed to provide an additional loan of US$ 17.6 million (approximately Rs.1.98 billion) for implementation of the Muttur Water Supply Scheme under the on-going Secondary Town and Rural Community Based Water Supply Sanitation Project. Minister Keheliya stressed that the proposed additional financing will ensure successful completion of the project benefiting about 50,000 people in the project area.

On a proposal made by the President, Cabinet approval was granted to conduct negotiations with the IDA of the World Bank to enter into an agreement to obtain a loan of US$ 38 million as additional financial assistance for the ongoing community livelihood development in the conflict affected areas.

“This is to support emergency rehabilitation and restoration of agricultural roads, tanks, minor irrigation schemes and cannels that were affected due to recent floods. This credit facility of the IDA is interest free and the project is scheduled to be completed in 2013.”

The Minister also explained that the Japanese government has agreed to provide a grant of Yen 360 million (Rs. 468 million) to purchase agricultural machinery and equipment for the use by low income farmers in the country. Under this project, 820 units of two-wheel tractors and 50 units of four-wheel tractors will he provided under this grant to assist food production. Cabinet approval was granted to sign the Exchange of Notes with the Government of Japan and to enter into a grant agreement with JICA.

In addition a project to reinforce the transmission network in the northern area by constructing 132 KV transmission line from Vavuniya to Kilinochchi and a grid substation at Kilinochchi is underway. The Cabinet paper stated that the Japanese Government has agreed to provide a loan of Yen 1,422 million (Rs. 1.8 billion) through the JICA, as additional financing for the project. Completion of this project will ensure reliable, adequate and efficient electricity supply to consumers in the Northern Province.