World Bank to provide USD 70 mn for rural development | Daily News


World Bank to provide USD 70 mn for rural development

The World Bank Board of Directors has approved a USD70 million credit to improve the quality of life of around one million people living in Northern, North Central, Eastern and Uva Provinces in Sri Lanka.

The new local development project will put local communities at the center of planning and delivery of essential services such as roads, healthcare, and sanitation through closer collaboration with local government authorities.

The new Local Development Support Project will be implemented by the Ministry of Internal and Home Affairs and Provincial Councils and Local Government along with the four Provincial Councils participating in the project. The total project cost is USD 100.65 million, including a USD 70 million credit from the International Development Association, with a USD 23.65 million grant from the European Union and USD 7 million contributions from the Government of Sri Lanka.

The majority of the funds will be transferred as either basic (USD 39.5 million) or performance (USD 38.65 million) transfers. Basic Transfers are based on the principle of equalization and aimed at ensuring the equitable distribution of intergovernmental fiscal resources across provinces and Local Authorities. This will be channeled as grants through the Provincial Treasury in 2 tranches, in March and September of each year.

Performance Transfers will be provided to qualifying Local Authorities to incentivize them to improve their institutional performance and service delivery outcomes. This will be channeled through the Provincial Treasury and distributed in September of each year based on the performance assessments undertaken for the previous year.

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