12 May 2021 08:27 am
The Cabinet of Ministers granted approval for the Finance Ministry to enter into an agreement with the Asian Development Bank (ADB) to borrow US$200 million under the third tranche of the second consolidated highways investment programme.
In 2017, the government initially entered into the agreement with the ADB for the investment programme that aimed to upgrade the country’s road network to connect vast rural populations to jobs and services.
Under the programme, the ADB had agreed to finance US$ 900 million in five tranches while the government was expected to meet US$ 184.6 million of the total programme cost.
The Cabinet of the Minsters on Monday approved a resolution furnished by Prime Minister Mahinda Rajapaksa in his capacity as Minister of Finance to enter into a loan agreement with the ADB in order to secure funds to finance the third tranche of the programme.
The investment programme is expected to improve access to the road network in Sri Lanka’s rural areas, supporting rural economic and social development.
According to ADB, the programme would upgrade and maintain about 3,400 kilometres (km) of rural access roads to an all-weather standard, rehabilitate and maintain about 340 km of national roads in Eastern, Northern, Uva, and Western provinces, and improve the capacity of road agencies with respect to safeguards, road safety, maintenance, research capacity, and road design and construction.
The ADB director board is expected to approve the third-tranche financing of the programme shortly.
Under the first tranche, the ADB disbursed US$150 million including US$60 million in concessional lending in 2018, and a further US$ 150 million was released as the second installment in 2020.
As of January 31, 2021, physical progress of the programme was at 36.1 percent. The ADB noted that the overall progress slowed down due to COVID -19. The programme is due for completion in 2027.