OFID loans additional US $ 18mn for Kaluganga project

OPEC Fund for International Development (OFID) has loaned an additional US$ 18 million to Sri Lanka for the Kaluganga Development Project (KDP), a Finance Ministry communiqué said.

KDP is currently being implemented by the Ministry of Mahaweli Development and Environment with the financial assistance of Saudi Fund for Development (SFD), Kuwait Fund for Arab Economic Development (KFAED) and OFID.

Kaluganga Reservoir has a capacity of 265 million cubic metres (MCM) of water and will divert 100 MCM annually to Moragahakanda Reservoir. Under this project, it is expected to develop new irrigable lands of nearly 3,000 ha in the Kaluganga Basin. Unforeseen geological conditions in the foundations and necessary design revisions have led to cost escalations and it is noted that the funds available from the above donors is not sufficient to complete the balance work of the project. Sri Lanka has already entered into an agreement with KFAED to finance a part of the balance of the shortfall. The balance part of the shortfall is to be obtained from SFD.