17 November 2017 10:30 am
Over the first eight months of 2017, Japan has made the greatest commitment to Sri Lanka in providing development related funding, according to the Treasury.
“Japan has made the highest commitment during this period which amounted to US$ 431.3 million,” the Fiscal Management Report 2018 of the Finance Ministry said.
India has made the second largest commitment of US$ 320 million, followed by World Bank with US$ 220.5 million. The Chinese have committed a US$ 58 million grant for economic and technical cooperation.
From January to August, the Sri Lankan government has managed to sign 24 agreements for financial commitments totalling US$ 1.2 billion, of which, US$ 1 billion were in the form of loans, and the rest in grants.
According to the Finance Ministry, the largest amount of funding amounting to US$ 394.5 million will go into the water supply and sanitation sector. The Kalu Ganga Water Supply Expansion Project was the largest development in this area, with US$ 279.5 million in financing provided by Japan at a fixed interest rate of 1.4 percent plus 0.01 percent.
Also in this development area, the European Investment Bank will be providing US$ 53.4 million for the implementation of the Greater Colombo Water and Wastewater Management Improvement Programme.
Ground transport—especially railway—development attracted US$ 318 million in development funding, with the entirety coming from India at a fixed interest rate of 1.75 percent. India has already provided funding in recent years for the development of the rail system, especially in the North of the island.The agriculture sector will receive US$ 188 million in funding. In order to modernize the sector, which employs 26 percent of Sri Lanka’s labour force but contributes just 7 percent to Gross Domestic Product, both the World Bank and the European Community will be providing US$ 119.7 million and US$ 32 million respectively.
The International Fund for Agricultural Development has committed to provide US$ 33.7 million to develop smallholder agribusiness partnerships.
Meanwhile, over the eight month period, Sri Lanka received US$ 901.6 million in development financing disbursements, of which 35 percent were from China, followed by the Asian Development Bank which contributed 22 percent of the total, and the World Bank which contributed 16 percent.
The education and training sector meanwhile will receive US$ 120 million in funding, mostly from the World Bank.