Japan lends Rs.53.8b for infrastructure projects

Increasing its borrowings, Cabinet yesterday gave approval for the Government to obtain Rs. 53.8 billion in loans from the Japanese Government for a range of infrastructure projects, including power transmission, bridges, and road construction.

The Cabinet statement notes that Rs. 23.9 billion has been allocated for the Greater Colombo Transmission and Distribution Loss Reduction Project that will concentrate on meeting the electricity demand in the capital.

The loan will be provided through the Japan International Cooperation Agency (JICA) and carries a 40-year repayment arrangement at an interest rate of 0.3 per cent. A grace period of 10 years is also provided.

“The objective of the project is to construct a transmission and distribution network in the Greater Colombo area to strengthen the transmission and distribution capacity, increase stability of power and reduce transmission losses,” the statement said.

The Cabinet paper was presented by President Mahinda Rajapaksa, who also signed on two other projects. The second agreement was to obtain funds to build 37 new bridges connecting various points of the national road network costing Rs. 18.5 billion. This loan too is provided by the Japanese Government through JICA and has a 30-year repayment plan at the same interest rate.

The third is named the Landslide Disaster Protection Project of the National Road Network and will cost Rs. 11.4 billion. Under this project, the Central, Sabaragamuwa, and Uva Provinces will be covered, though the exact nature of the work to be undertaken was not given.

All three projects will also cost the Government 0.01 per cent in consultation fees as well.