Rs. 34, 525 m Japanese ODA loan package for three projects

The Government of Japan provided its 38th official Development Assistance (ODA) loan to the Government of Sri Lanka, amounting to Yen 39,233 million (approximately Rs. 34,525 million) to enhance the country's economic developments initiatives considering the regional and ethnic balance from the point of medium and long term aspects.

The loan package will finance three important projects, namely "Pro-poor Rural Development Project", "Greater Colombo Urban Transport Development Project" and "Water Sector Development Project", and is extended at an interest rate of 1.50% per annum repayable in 40 years inclusive of a 10-year grace period. The loans are offered on highly concessionary terms and administered by the Japan Bank for International Cooperation (JBIC).

The exchange of notes was signed by Nobuaki lto, Charge d' Affaires a.i. of the Embassy of Japan and Dr. P. B. Jayasundera, Secretary to the Ministry of Finance and Planning on March 23 at the Ministry of Finance and Planning.

These three projects are in line with the needs identified by the Government of Sri Lanka and will contribute to poverty alleviation and economic developments through improvement of basic infrastructure.

The "Pro-Poor Rural Development Project" will reduce rural poverty and mitigate regional inequality by enhancing the accessibility to economic and social services through improvement of rural roads in selected districts throughout the country. The project will ensure the construction, rehabilitation and improvement of road network in Ampara, Badulla and other rural areas.

The "Greater Colombo Urban Transport Development Project" will construct an expressway in the outskirts of Colombo, named "Outer Circular Highway" which will connect the Southern Expressway and other national roads radiating from Colombo city, to mitigate traffic congestion in the Colombo Metropolitan area and enhance connectivity with other regions, thereby contributing to strengthening economic infrastructure of the country.

The "Water Sector Development Project" will improve the living environment by expanding the facilities for safe drinking water and sanitation in Colombo and Kandy cities.

In implementing these projects, Japan pays careful attention to the stable political and social environment, the efficient macro economic management, the structural reform and the regional and ethnic balance from the point of medium and long term aspects.

In its economic cooperation efforts to Sri Lanka, Japan also recognises the importance for Sri Lanka to make efforts to resolve the ethnic problem through peaceful dialogue and correct the inequality between and within regions and sectors under current challenges to implement good governance in the North and East region.

In this context, Japan has contributed towards the reconstruction in the North and East, and assures its continuous assistance including the construction of the Mannar Bridge, assistance for de-mining relief and resettlement of IDPs and social infrastructure for the sustainable economic development.