Govt. signs loan agreements with OPEC fund to renovate highways

The Government has signed two new loan agreements with OPEC Fund for International Development (OFID) today to obtain a part financing for rehabilitation of a major highway and upgrade several road segments in the Western Province.

The funds will be utilised to rehabilitate the A5 Road corridor from Badulla to Chenkaladi, which is one of the major highways linking parts of the Central Province to the Eastern Province geopolitical zones of the country which carries the bulk of the traffic between Batticaloa and Peradeniya via Badulla and to finance upgrading the conditions of selected road segments and highways in the Western Province.

Finance Minister Ravi Karunanayake and Director General of OFID, Suleiman Jasir Al-Herbish, inked both loan agreements yesterday in Vienna, Austria.

Both projects will stimulate the economy by enhancing people’s access to markets and social infrastructure such as schools and hospitals and integrating isolated segments of the rural population into the overall economy, the Finance Ministry said.

Furthermore, reduction in the travel time due to the reduction of traffic congestion, reduction in vehicle operation costs mainly fuel and maintenance would ultimately reduce the travel cost benefiting both passengers and industries.

The total estimated cost of the project for rehabilitation of the A5 road corridor from Badulla to Chenkaladi is $ 140 million and the Financing Agreement with OFID was signed to obtain a partial financing of $ 60 million. The balance will be jointly financed by the Saudi Fund for Development and the Sri Lanka Government. 

An interest rate of 2.5% and a service charge of 1% would be applicable for this loan, which has to be repaid in a 20-year period, including a five-year grace period.

The total cost of the Western Province Road Development Project was estimated at $ 22.7 million where the OFID will jointly finance the project with the Sri Lankan Government by providing $ 17 million. An interest rate of 2.6% and a service charge of 1% will be applicable for this loan, which has to be repaid to be in a 20-year period including a five-year grace period.