Three-year plan to provide funding:

ADB pledges to support NE development

The Asian Development Bank (ADB) will support Sri Lanka’s post war development effort and has drawn up a three-year plan to provide funding mainly focusing on development activities in the North and the East.

“With the end of the war Sri Lanka now faces the huge task of reconstruction and development of the North and the East. The ADB hopes to play an important role in infrastructure development in these provinces and will enhance support to Sri Lanka”, said ADB Country Director, Sri Lanka Resident Mission Richard Vokes.

Over 60 percent of the funding is expected to target the North and the East provinces under the ADB’s proposed program over the next three years.

There has been significant improvement in investor confidence and the tourism industry is picking up.

There are prospects of -much higher economic growth next year, he said.

The ADB has approved US $ 330 million for three projects - namely $ 160 million for a clean energy and access improvement project to develop the power sector, $ 70 million Eastern and North Central provincial road project to rehabilitate 150 kilometres of provincial roads in the Eastern Province and 220 kilometres of provincial roads in the North Central province and a $ 100 million Greater Colombo waste-water management project to improve urban environment and public health of urban and suburban residents in Colombo through an improved waste-water management service, he said.

The ADB assistance for 2010, 2011 and 2012 will be nearly $ 300 million on average. Funds will be used to support areas of energy, transport and water supply. It aims at energy efficiency improvements, developing use of renewable energy and increasing connections and services to rural households including poor households in conflict-affected areas in the North and the East.

The road sector continues to be a key sector receiving support from the ADB and the recently completed projects includes the road network improvement project which was completed improving 309 national roads and 77 bridges.

Another key area of support is the ADB’s North East Coastal Community Development Project and North East Community Restoration and Development Project have continued to assist vulnerable communities to improve livelihoods, meet basic needs and strengthen community management of natural resources.

The communities have been empowered to identify and prioritize their needs in basic community level infrastructure, he said.

Sri Lanka’s economy is growing extremely well and expected to grow at around seven percent.

Once the impact on the election eases there would be accelerated growth. However, this depends on how economic policies are managed in the post election period, said Lead Economist Narhari Rao.

The continuous efforts by the Government to reduce inflation, effective monetary policies and reduction in interest rates have had a positive impact on economic growth.

It is important to focus on reducing the fiscal deficit, building reserves and financial sector reforms. Overall, a positive picture for the Sri Lanka’s economy could be anticipated in the years ahead, he said.