South Asia

The core sectors of ADB’s operations are transport, education, water supply and sanitation, energy, and rural development (small and medium-sized enterprises and agriculture). The emphasis of the Government, voted into power in November 2005, is spreading development to rural areas to achieve the Millennium Development Goals and reduce regional inequality and income poverty. The Government intends to finalize its 10-year development plan by early 2007. The plan will form the basis for ADB’s country partnership strategy, which will be finalized in late 2007. The security situation is likely to have an impact on ADB’s project implementation and processing in the north and east of the country. The ADB strategy will need to take into account the security situation and its possible overall impact on fiscal management.

ADB approved supplementary financing of $60.0 million for the Secondary Towns and Rural Community-Based Water Supply and Sanitation Project. It has a significant community participation component, involving all stakeholders in project design, which is especially relevant for its components in the north and east of the country. Considerable progress in processing was made in three further loans. The project to expand Colombo Port moved ahead with a memorandum of understanding signed between the minister of ports and aviation and ADB in September 2006, and the request for proposals for the breakwater issued in January 2007. The bulk of the work for a small and medium-sized enterprise development project was completed in 2006. Major progress has been made on the upgrading of a major expressway to the south to four lanes. ADB approved four technical assistance grants in 2006 for a total of $2.3 million.