Asian Development Bank Approves $100 Million Loan For Sri Lanka

The Asian Development Bank (ADB) has approved a USD 100 million policy-based loan aimed at supporting Sri Lanka’s water supply and sanitation sector reforms. The loan will enhance the country’s resilience to climate change impacts and promote long-term sustainability.

Details of the Water Supply and Sanitation Reform Program

The approved loan is part of the Water Supply and Sanitation Reform Program, which consists of two subprograms, each valued at USD 100 million. This initiative aims to improve the delivery of water supply and sanitation services in Sri Lanka, making them more resilient and sustainable.

• Subprogram 1: This phase will focus on establishing national policies and strategies, as well as frameworks for the National Water Supply and Drainage Board (NWSDB).
• Subprogram 2: This phase will support the implementation of the reform actions and guidelines developed in Subprogram 1.

Objectives and Expected Outcomes

Pedro Almeida, Senior Urban Development Specialist at ADB, emphasized the program’s goals: “Efficient delivery of safe and reliable water supply in Sri Lanka is limited by fragmented water resources management and exacerbated by climate change.

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This program will not only strengthen mechanisms to ensure adequate access to safe water but also address governance and sustainability challenges of the sector that will enable the participation of the private sector.”

Challenges in Water Resources Management

Sri Lanka faces several long-standing challenges in water resources management, including:

• Unbalanced allocation between agricultural and drinking water needs
• Inadequate consideration of climate change in planning and development
• Fragmented involvement of various national and regional agencies
• Negative impacts from unplanned land use and deforestation

Technical Assistance and Funding

In addition to the loan, the program includes USD 800,000 in technical assistance grants. This funding will support capacity building and advisory services for the Ministry of Water Supply and Estate Infrastructure Development (MWS) and the NWSDB. The technical assistance will aid in the formulation, deployment, implementation, and monitoring of the reform initiatives.

• Technical Assistance Special Fund: USD 500,000
• Water Innovation Trust Fund: USD 300,000 (administered by ADB under the Water Financing Partnership Facility)

Established in 1966, the ADB is owned by 68 members, with 49 from the region.

(WITH INPUTS FROM ANI)

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