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USD 453 mn from ADB for Mahaweli Water Security Investment Program

-      The Total Investment USD – 675 mn

 

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The Mahaweli Water Security Investment Program is one of the major ongoing investment program currently being implemented under the loan assistance of the Asian Development Bank(ADB) The total investment cost of this program is USD 675 million of which USD 453 million will be provided by ADB under Multi - tranche Financing Facility (MFF). The Government of Sri Lanka has already signed two loan agreements with ADB to obtain USD 150 million to finance the first tranche of the programme.

Three major investment projects; Upper Elahera Canal Project, North Western Province Canal Project, Minipe Left Bank Canal Rehabilitation Project will be implemented under the above investment program. The construction of new and improved water conveyance and storage infrastructure under this program will increase the productivity of agricultural lands in the North Western, North Central and Central Provinces. Constructions of 158 Km canals including 38 km of tunnels are being implemented. In addition construction of two new reservoirs with storage capacity of 36 MCM (Million Cubic Meters) are also included in the program. Rehabilitation of 74 km Minipe Left Bank Canal is also programmed under this investment.

25,000 farmer families under Upper Elahera Canal Project, 40,000 farmer families under North Western Province Canal Project and 15,000 farmer families under Minipe Left Bank Canal Rehabilitation Project will be directly benefited through this whole program. In addition, provision of safe drinking water for people live in those areas will help to prevent Chronic Kidney Disease. (CKD)

 

The Loan Signing ceremony of the above three Loan Agreements with the UniCredit Bank and the People’s Bank was held at the Ministry of Finance and Mass Media

 

Having recognized the importance and urgency of implementation of Kirama Katuwana Water Supply Project and project for Augmentation of Water Pipelines along with the Orugodawatta Ambatale Road Development Project, the Government has now been able to finalize the funding arrangements with foreign and local banks. Accordingly, UniCredit Bank of Austria has agreed to provide Euro 61 million (approximately SLR 11,285 million) Credit Facilities for the implementation of the above two projects.

Under the Kirama Katuwana Water Supply Project, it is planned to construct a 3500m3/day water treatment plant and other necessary infrastructure to cater to the drinking water requirement of around 31,000 people living in Katuwana and Walasmulla Divisional Secretariat areas including semi urban communities in Kirama and Katuwana townships. The Austrian Government through the UniCredit Bank of Austria provides an interest free soft loan of Euro 10.48 million to finance this project.

The objective of the Augmentation of Water Pipelines along with the Orugodawatta Ambatale Road Development Project is to shift the existing more than 100 years old water utility pipe network laid along with the Orugodawatta – Ambathale road section into the utility corridor of the road which is being constructed.  An Export Credit Facility amounting to Euro 50.6 million will be provided by the UniCredit Bank of Austria to the National Water Supply and Drainage Board to finance 85% of the project cost.

The People’s Bank has agreed to provide the balance 15% of the project cost (approximately SLR 1,410 million).

The Loan Signing ceremony of the above three Loan Agreements with the UniCredit Bank and the People’s Bank was held at the Ministry of Finance and Mass Media in the presence of the Minister of City Planning and Water Supply Mr. Rauff Hakeem. Secretary to the Ministry of Finance and Mass Media Dr. R.H.S. Samaratunga, Chairman of the National Water Supply & Drainage Board Mr. A. Ansar, a representative from the UniCredit Bank of Austria Mr.Ried Reinhard, and the Head of Corporate Banking of the People’s Bank Mrs Aruni Gunathillake signed these agreements on behalf of their respective organizations on 8th March 2018.

 

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 The Government of Sri Lanka entered into 3 Loan Agreements worth of USD 270 million with the Asian Development Bank for the implementation of two projects; Integrated Road Investment Program and Jaffna Kilinochchi Water Supply Project. A loan of USD 150 million was obtained for the investments required for the 4th Tranche of the Integrated Road Investment Program and two loans worth of USD 120 million were obtained as additional financing for the investment required for the ongoing Jaffna Kilinochchi Water Supply Project.

Integrated Road Investment Program – Tranche 4

The Integrated Road Investment Program is being implemented in six Provinces; i.e. Southern, Central, Sabaragamuwa, North Western, North Central Provinces and Kalutara District in Western Province under the financial assistance of Asian Development Bank since 2014 with the aim of building up better connectivity between rural communities and socio economic centers. About 3108 km of rural access roads and about 248 km of national roads will be improved and maintained under this program. In addition, the program is focused on enhancing the capacity of road agencies on road asset management, project management and contract administration. The total investment cost of the overall program is US$ 906 million of which US$ 800 million will be provided by ADB under Multi-tranche Financing Facility (MFF) through six tranches. The Government contribution for the total program is US$ 106 million. The government has already obtained loan assistance of US$ 407 million from ADB under the 1st, 2nd and 3rd tranches. The total investment cost of the proposed tranche 4 is US$ 168 million. The Government will contribute US$ 18 million and the balance US$ 150 million will be obtained from ADB.

Jaffna Killinochchi Water Supply and Sanitation Project – Additional Financing

Safe drinking water is an essential prerequisite for better health and socio economic development in a country .The focus of the Government to provide safe drinking water to the entire population of the country by 2020 of which 60 percent would be pipe borne water.

In line that, the overall impact of the Jaffna Killinochchi Water Supply Project is to improve health and human development in urban areas of Jaffna Peninsula. Improvement of headwork at the Iranamadu water Tank, implement of water supply infrastructure and services in the Jaffna Peninsula and strengthening of water resources management system are the main components of this project. Additional financing of the Jaffna Kilinochchi Water Supply Project will support restructuring of the current project by financing the cost overrun under the current project and supporting the additional activities of the desalination plant and related works under the component of improvement of water supply infrastructure and services in the Jaffna Peninsula and additional activates of the water resource management system component.

The total investment cost of the Jaffna Killinochchi Water Supply Project - Additional Financing will be US$ 153 million. The Government will contribute US$ 33 million and the balance portion of US$ 120 million will be provided in two loans by ADB

In this connection, at the Ministry of Finance and Mass Media, Dr. R H S Samaratunga, Secretary of the Ministry of Finance and Mass Media on behalf of the Government of Sri Lanka and Ms. Sri Widowati, Country Director of ADB Sri Lanka Resident Mission on behalf of ADB, signed a three Loan Agreements on 15th December 2017 to obtain USD 270 million for the implementation of the Integrated Road Investment Program – Tranche 4 and Jaffna Killinochchi Water Supply Project (Additional Financing).

 

 

 

 

 

 

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The Government of Sri Lanka obtained ADB Financial assistance of USD 100 million in 2016 to finance the Small and Medium-Sized Enterprises (SME) Line of Credit Project. The objective of the project was to strengthen the SME sector in Sri Lanka by facilitating access to finance and expand the employment opportunities in the sector. The project is being successfully implemented and given the importance of this intervention, the Government of Sri Lanka decided to obtain an additional financing through a loan of USD 75 million with the intention to scale up the ongoing SME Line of Credit Project.

The Additional financing will be utilized to deliver four outputs through the project : Increase of financing to SMEs through intermediaries, Development of innovative SME financing scheme, Enhancement of capacity of SMEs in targeted clusters for accessing financial services and Strengthening of international competitiveness of information and communication technology/business process outsourcing (ICT/BPO) cluster.

The additional loan of USD 75 million is planned to be disbursed in 3 tranches of approximately USD 25 million each. The Government will relend the loan funds in local currency to participating banks through three semiannual allocations based on the banking sector’s average weighted deposit rate. The proceeds of the loan will be available to the participating banks for relending to the SMEs based on the previously agreed targets between the Asian Development Bank and the Government specially focusing on first time borrowers, women-led SMEs and SMEs located outside of Colombo etc. Further, participatory banks should achieve SME on-lending targets before participating in subsequent allocations.


The Ministry of Finance and Mass Media will be the Executing Agency of the SME Line of Credit (Additional Financing). The Department of Development Finance will be the Implementing Agency for Outputs of Increase of financing to SMEs through intermediaries, Development of innovative SME financing scheme and Export Development Board will be the implementing agency for outputs of Enhancement of capacity of SMEs in targeted clusters for accessing financial services and Strengthening of international competitiveness of information and communication technology/business process outsourcing (ICT/BPO) cluster. The overall project is scheduled to be completed by 31st March 2020.

In this connection, Dr. R H S Samaratunga, Secretary to the Ministry of Finance and Mass Media on behalf of the Government of Sri Lanka and Ms. Sri Widowati, Country Director of ADB – Sri Lanka Resident Mission on behalf of ADB, signed the loan agreement to obtain USD 75 million on 16th February 2018 at the Ministry of Finance and Mass Media.

 

 

 

Strengthening the financial cooperation between the Government of Sri Lanka and the People’s Republic of China in the field of the infrastructure development of Sri Lanka, the Export- Import Bank of China (EXIM Bank) has agreed to provide concessional loans amounting to USD 492 Mn, facilitating 03 major infrastructure projects in the fields of irrigation, water supply and road sector development for the year 2017. Accordingly, the Government of Sri Lanka signed three loan agreements with the EXIM Bank of China obtaining financing facilities for Thalpitigala Reservoir Project, Kandy North-Pathadumbara Integrated Water Supply Project and Consultancy Services for Design Review and Construction Supervision of Civil Works on Extension of Southern Expressway Project on 22nd December 2017. These projects will be commenced in early 2018.

The EXIM Bank of China will provide a loan of USD 147,900,000 under the Preferential Buyer Credit (PBC) facility to implement the Thalpitigala Reservoir Project which is one of the major irrigation projects aiming at improving the agricultural productivity of the country. Thalpitigala Reservoir is planned to construct in the upstream of the Battmedilla anicut in the Baudlla district. It expects to provide irrigation water to new and existing lands around 1400 hectares in the area. In addition, it is proposed to provide safe drinking water facilities to Wasanagama, Madulla, Thetilla and Beramada villages in the Kandaketiya Divisional Secretary's Division. The project also envisages the construction of a hydro power station with a capacity of 2x7.5 MW that will generate 51 GWh of hydro power annually to feed the National Grid

Kandy North-Pathadumbara Integrated Water Supply Project aims at providing safe pipe borne water supply facility to six Divisional Secretariat Divisions namely Pathadumbara, Harispattuwa, Akurana, Pujapitiya, Kandy Four Gravets and Thumpane. It is expected to provide 30,000 new connections through this project and the total beneficiaries will be 120,000 from the new connections. Also the service level will be enhanced for 365,000 existing consumer population. Once this project is implemented, it will address the water shortage in Dunuwila, Pallethalawinna, Udathalawinna, Wattegama and Pitiyegedara areas in the Pathdumbara Division and other areas such as Barigama, Kurundugahamada, Vilana, Alawathugoda, Owissa, Bokkawala and Galhinna in the Kandy District. Further, this project will also improve the Kandy City water supply. Through the signed agreement, the EXIM Bank of China will provide a concessional loan of RMB Yuan 1,636,553,500 (Approximately USD 254,518,429) to finance this project.

The Southern Expressway Extension from Matara to Hambantota with a total length of 96 km consists of four main sections namely Section 1 (from Matara to Beliatta - 30 km), Section 2 (from Beliatta to Wetiya - 26 km), Section 3 (from Wetiya to Andarawewa - 15 km) and Section 4 (from Mattala to Hambantota via Andarawewa - 25 km). The Government has already signed four Loan Agreements with the EXIM Bank of China to finance civil work contracts and the construction work of all 4 sections are ongoing without any significant hindrance. Accordingly, it is expected to complete the construction of the expressway from Matara to Hambanthota by year 2019. In order to maintain smooth implementation of this important mega project, the EXIM Bank of China has agreed to finance the consultancy contract for the above project. Accordingly, a loan agreement amounting to RMB Yuan 577,000,000 (Approximately USD 90 Mn) was signed with the EXIM Bank of China to finance the Consultancy Services for Design Review and Construction Supervision of Civil Works on Extension of Southern Expressway Project.

The aforementioned three loan agreements were signed on 22nd December 2017 by Ms. G D C Ekanayake, Acting Secretary, Ministry of Finance and Mass Media on behalf of the Government of Sri Lanka and Ms. Li Dan, Deputy General Manager, Concessional Loan Department on behalf of the Export – Import (EXIM) Bank of China.


Department of External Resources
Colombo 01
Sri Lanka
On 22nd December 2017

 

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