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Two ADB Projects to Help Rebuild Tsunami- and Conflict-Affected Sri Lanka

MANILA, PHILIPPINES (14 April 2005) - The Asian Development Bank (ADB) has approved a US$197 million grant and loan package for two projects [ PDF ] that will help rebuild tsunami- and conflict-affected areas of Sri Lanka. External funding for the projects will total $256 million including grant cofinancing by the European Commission and Sweden.

A $150 million grant and a $7 million loan for the Tsunami-affected Areas Rebuilding Project (TAARP) will help to rapidly improve the living conditions of people in tsunami-affected areas by restoring basic social infrastructure, community and public services, and livelihoods.

The grant comes from ADB's Asian Tsunami Fund, set up in February with an initial ADB contribution of $600 million to deliver prompt emergency grant funding to tsunami-affected countries. The loan comes from reallocated surplus loan funds from other ADB projects in Sri Lanka.

An additional $14 million grant and a $26 million loan for the North East Community Restoration and Development Project II (NECORD II) will continue the Government's rehabilitation program in conflict-affected areas of the Northern and Eastern provinces.

As Sri Lanka is eligible to receive grants from ADB's concessional Asian Development Fund (ADF), both this grant and loan will come from ADF.

"As pre-tsunami conditions in the North East make it difficult to demarcate tsunami- and conflict-related rebuilding needs, ADB assistance for post-tsunami reconstruction and NECORD II will be implemented simultaneously," says Alessandro Pio, Country Director at ADB's Resident Mission in Sri Lanka.

"This will ensure that the same policies and implementation mechanisms are adopted in both cases, avoiding perceptions of unequal treatment and reducing the risk of creating social tensions. Together, the two projects will address the urgent needs of about three million people."

The coastal areas of the Northern and Eastern provinces had only recently begun to emerge from the devastating effects of nearly 20 years of civil conflict when the tsunami hit.

The conflict left more than 65,000 dead, several times as many people disabled, and nearly 800,000 people displaced from their homes. Reconciliation and restoration efforts began after a ceasefire agreement was signed three years ago, but many of the gains were quickly destroyed by the tsunami on 26 December 2004.

The tsunami waves that struck over two thirds of Sri Lanka's coastline on that day left more than 31,000 people dead, thousands more missing, and about 440,000 people displaced. About 60% of the tsunami damage occurred on the east and northeast coasts.

Tsunami-related needs for rebuilding alone are estimated at $1.5 billion, based on a joint needs assessment conducted by the Government and the international donor community, including ADB. Conflict-related needs for relief, rehabilitation, and reconstruction are estimated to be double that amount, with $780 million identified for immediate needs.

"If the conflict- and tsunami-affected communities are to recover and begin the long climb back to normalcy, basic socioeconomic facilities urgently need to be restored," says Robert Rinker, a Portfolio Management Specialist at ADB's Sri Lanka Resident Mission.

TAARP will help rebuild about 300 kilometers of national roads and 400 km of access roads, repair damaged water supply and sanitation facilities, restore livelihoods, provide microcredit and improve coastline protection.

It will also provide legal assistance to help victims address legal and documentation issues, such as the replacement of birth, death, and marriage certificates, property titles, and identification cards, as well as support for good governance and anticorruption efforts in the delivery of tsunami aid.

In addition, the project will redesign and rebuild basic and social infrastructure under NECORD that was destroyed by the tsunami.

NECORD II will address basic needs in the conflict-affected North East through health, education, irrigation, agriculture, community development, institutional infrastructure, and income-generating projects.

Given the recent increase in construction activity in the North East, NECORD II includes an HIV/AIDS awareness campaign to be carried out among construction workers and internally displaced people.

"By restoring the sectors that form the backbone of the economy in affected areas, the projects will help to rebuild communities and stabilize the economic base of the local populations, allowing them to move from dependency on government support toward sustainable livelihoods," adds Mr. Rinker.

The Government will contribute $39.1 million equivalent toward TAARP's total project cost of $249.3 million, and $9.1 million equivalent toward NECORD II's total project cost of $55 million.

The European Commission will provide a grant of $53.2 million for TAARP, and the Government of Sweden, through the Swedish International Development Cooperation Agency, will provide a grant of $5.9 million for NECORD II.

More at adb.org/media

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