WB provides US$ 125 million for three projects in NE

Tuesday, 9 November 2010 04:55 - - {{hitsCtrl.values.hits}}

Sustainable tourism, SMEs and local service improvements targeted

The Government and the World Bank jointly signed three projects with agreements totalling US$ 125.4 million (Rs. 14 billion) yesterday for Small and Medium Enterprise (SME) development, north and east local service improvements and sustainable tourism development.

The agreement allocated US$ 57.4 million to strengthen access to finance for SMEs. A press release issued by the World Bank remarked that it was to support the Sri Lankan Government’s efforts to improve access to finance for SMEs affected by the global financial crisis. It aims to broaden and deepen the access of medium and long term credit to SMEs. With project assistance the expectation is that thousands of SMEs running in the country would benefit.

“The three projects signed today will help Sri Lanka reap maximum benefits of the peace dividend and make further progress towards becoming a Middle Income Country,” said Acting World Bank Country Director for Sri Lanka Amit Dar, adding that the project aims to incentivise banks to provide credit to SMEs while building their SME lending capability over time. Dar and Treasury Secretary Dr. P.B. Jayasundara signed the agreement.

The US$ 50 million North East Local Services Improvement Project is designed to augment resource transfers and building capacity of local authorities, the bottom tier in the Government structure, so that they are well equipped to deliver much-needed local services to the citizens in an accountable manner.

This project will support repairing and rebuilding critical infrastructure – from rural roads, culverts and bridges to public buildings, waste disposal, and rural water supply. Importantly, all infrastructure projects will be identified and prioritised by the citizens themselves.

The project will cover 65 Pradeshiya Sabhas, nine urban councils in the north and three in the east together with three municipal councils in Jaffna, Kalmunai and Batticaloa. The programme is to be completed in 2013.

The Sustainable Tourism Development Project aims to facilitate environmentally and socially sound investments in the tourism sector, focusing particularly on the eastern part of the country. The US$ 18 million will additionally build capacity in the tourism sector’s institutional structure to improve efficiency in service delivery.

“The Eastern Province of Sri Lanka has an enormous tourism potential,” said World Bank Private Sr. Sector Development Specialist and project Task Team Leader Michael Wong. “This project will help to expand economic opportunities in the east, making the tourism sector more competitive and inclusive while maintaining Sri Lanka’s heritage and ecological environment.”

The credit assistance will also strengthen the institutional framework for the tourism sector to facilitate socially and environmentally sound investments, especially in the Eastern Province. In addition necessary financial and technical assistance will be provided to develop tourism related infrastructure in the east. It will concentrate on attracting private sector investments and increasing the number of employment in the area.

The credits from the International Development Association (IDA), the World Bank’s concessionary lending arm, have 20 years to maturity with a 10-year grace period.