ADB loans $120 million to Sri Lanka to improve power network
Sri Lanka will receive a $120 million Asian Development Bank (ADB)
loan to help expand and improve its power network to deal with rising
customer demand and gaps in coverage which are hindering growth.
ADB's Board of Directors approved the loan, along with a technical
assistance grant for the Sustainable Power Sector Support Project which
will be used to build hundreds of kilometres of new transmission lines,
to strengthen distribution systems in rural areas, and to electrify
about 12,000 households in remote villages.
The project will target regions such as Eastern and Uva Provinces
where electrification is below the national average and the power supply
unreliable.
"This project will help expand coverage, and improve the efficiency
and reliability of electricity supplies in areas that require them most
urgently, thus supporting the government's goal of providing nearly 100
percent of households in the country with electricity by 2016," said
Senior Energy Specialist ADB Mukhtor Khamudkhanov.
The project will also help the government reduce imports of
expensive, polluting fossil fuels by providing a credit line of nearly
$1.3 million to private developers for about 19 targeted small
hydropower facilities and by financing the detailed engineering design
of a 30 megawatt hydropower plant.
The technical assistance will help create a national energy
efficiency strategy and implement urgent energy efficiency policy
initiatives.
The loan funds will include a 25-year $110 million loan from ordinary
capital resources and a 32-year $10 million equivalent loan from ADB's
concessional Asian Development Fund.
The Government of Sri Lanka will provide just over $42 million, for a
total project cost of about $162 million.
The technical assistance will include a $1.85 million grant from the
Asian Clean Energy Fund, established by the Government of Japan, under
the Clean Energy Financing Partnership Facility administered by ADB, and
nearly $400,000 from the Government of Sri Lanka.
The Ministry of Power and Energy is the executing agency for the
project which will run for three years with an expected completion date
of April 2014.
ADB, based in Manila, is dedicated to reducing poverty in Asia and
the Pacific through inclusive economic growth, environmentally
sustainable growth, and regional integration. Established in 1966, it is
owned by 67 members - 48 from the region.
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