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by Gamini Warushamana

Sri Lanka and France signed several bilateral agreements on October 5 during President Chandrika Bandaranaike Kumaratunge's visit to France to participate in the general conference of UNESCO.

A credit facility agreement was signed to finance infrastructure development projects in tsunami hit Trincomalee district. The French Development Agency (AFD) provided Euro 64 million for the Integrated Infrastructure Project and the agreements were signed by Sri Lanka's ambassador in France and the Secretary General of the AFD.

The funds will be used to finance rehabilitation and reconstruction of properties damaged by the tsunami in the district. Of them Euro 40.3 mn will be spent to construct national highways, Euro 10.3 mn for water supply, Euro 2.1 mn for power transmission and Euro 11.3 mn for community development. The credit provided by AFD is on concessionary terms and the interest rate is 1 percent per year and payable within 20 years with 10 years' grace.

The French government has also agreed to extend the debt deferral for Sri Lanka's outstanding debt amounting to Euro 6.1 mn as per the agreement signed between the Paris Club and Sri Lanka.

Another MoU was signed to provide Euro 10 mn for the greater Trincomalee water supply scheme. The funds will be provided under the Reserve Fund for Emerging Markets.

The credit is also focused on tsunami reconstruction. The fund will be used to expand the water supply scheme of the Trincomalee city.

The feasibility study of the project was done by the Water Supply and Drainage Board with a grant provided by the French government.

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