President Maithripala Sirisena (left) and ADB President Takehiko Nakao (right) after signing the three loan agreements totaling US $455 million at ADB headquarters
- US $145mn loan to modernize science & technology faculties of 4 universities
- US $ 300mn loan to finance construction of elevated toll highway linking Colombo port to expressway network
President Maithripala Sirisena, who is currently on an official visit to Philippines, yesterday signed three loan agreements totaling US $ 455 million with the Asian Development Bank (ADB) for projects in higher education and transport as well as technical assistance loan for the urban sector.
Accordingly, a US $ 145 million loan was signed for a project to support the development of science and technology faculties in four universities to nurture a new breed of technology-oriented graduates.
President Sirisena signed another US $ 300 million loan agreement to finance the construction of about 5.3 kilometers of an elevated toll highway to link Colombo’s international port with the country’s expressway network.
And, he also signed a US $ 10 million technical assistance loan to finance the establishment of a facility that will help improve the design and implementation of Sri Lanka’s urban projects.
This was Sirisena’s first visit to the headquarters of the Manila-based development lender.
ADB said their total commitment to Sri Lanka this year, including these three loans, will amount to US $ 815 million.
ADB expects to continue to maintain a strong pipeline of projects totalling to about US $800 million a year in the current Country Partnership Strategy (CPS), 2018–2022, compared with US $500 million a year in the previous CPS period.
During President Sirisena’s visit, ADB President Takehiko Nakao also discussed development challenges faced by Sri Lanka and ADB’s role in helping address them.
“Sri Lanka highly values the assistance provided by ADB to various development plans of the country,” said President Sirisena. “The economic cooperation extended by ADB is of extreme benefit to the countries grappling with development issues.”
Nakao commended Sirisena on Sri Lanka’s achievements in reducing poverty to low single digits and improving human capital. Building on its achievements so far, Sri Lanka needs to seek higher growth to achieve the goal of becoming an upper middle-income country by 2025.
He acknowledged the government’s fiscal consolidation efforts, supported by an International Monetary Fund programme that resulted in a primary surplus in 2017 for the first time in 63 years.
“The government has taken encouraging steps to strengthen the country’s public finances and it is essential to continue those measures to reduce debt,” Nakao said.
ADB also appreciated the steps introduced by the Sri Lankan government to improve the business climate, increase exports, and attract foreign direct investment.
Nakao stressed the need to continue those reforms to draw foreign investors to the country who can bring knowledge and new practices. It is also important that Sri Lanka strengthens its linkage to regional and global value chains.
“ADB’s technical and financial assistance to support the development of capital markets and small and medium enterprises are well aligned with the government’s reform priorities,” he noted.
ADB’s CPS for Sri Lanka focuses on building high quality infrastructure in the transport, energy, and urban sectors by expanding investments in new areas such as railways, wind and solar power generation, and economic corridors.
In the social sectors, ADB is also broadening its support for higher education and health centres. Projects in rural areas such as the Mahaweli Water Security Investment Programme and Integrated Road Investment Programme will support farming communities and help boost rural incomes.
ADB’s private sector operations continue to provide loans, equity investments, or guarantees for public and private banks, nonbanking financial institutions, and corporations.
Sri Lanka was a founding member of ADB in 1966. Since the first loan to the country in 1968 to help modernize tea factories, ADB has supported Sri Lanka’s economic transformation with assistance totalling US $9.8 billion, including concessional loans and technical assistance.
Over the half century, ADB has worked in the country in various sectors, including agriculture and natural resources, rural development, transport, energy, urban infrastructure, education and skills, financial services, private sector development, and public sector management.