Sri Lanka: Mahaweli Water Security Investment Program

Sovereign Project | 47381-001

Summary

The Mahaweli Water Security Investment Program will assist the government complete outstanding water conveyance investments under the Mahaweli Development Program (MDP). Completion of MDP is a key priority of the government and will maximize the productivity of Mahaweli River Basin water resources by transferring available water to the northern dry zone areas of Sri Lanka for irrigation, drinking and commercial purposes. This will accelerate local and national economic growth. The investment program follows the multitranche financing facility (MFF) modality.

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Project Name Mahaweli Water Security Investment Program
Project Number 47381-001
Country Sri Lanka
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
MFF Facility Concept 0088-SRI: Mahaweli Water Security Investment Program
Ordinary capital resources US$ 262.00 million
Asian Development Fund US$ 191.00 million
MFF Facility Concept: Mahaweli Water Security Investment Program
European Investment Bank US$ 60.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Sector / Subsector Agriculture, natural resources and rural development - Irrigation - Water-based natural resources management
Gender Equity and Mainstreaming No gender elements
Description The Mahaweli Water Security Investment Program will assist the government complete outstanding water conveyance investments under the Mahaweli Development Program (MDP). Completion of MDP is a key priority of the government and will maximize the productivity of Mahaweli River Basin water resources by transferring available water to the northern dry zone areas of Sri Lanka for irrigation, drinking and commercial purposes. This will accelerate local and national economic growth. The investment program follows the multitranche financing facility (MFF) modality.
Project Rationale and Linkage to Country/Regional Strategy

At the national level, Sri Lanka has abundant access to water resources with about 50,000 million cubic meters (MCM) of annual runoff and an annual per capita endowment (ACE) of 2,500 cubic meters (m3), well above the 1,700 m3 threshold defining water stress. However, there are significant spatial and temporal variations; the northern dry zone river basins contribute only about 11% of the country's total runoff volume and only during the December to February period. This amounts to a local ACE of 1,200 m3 indicating severe water stress which is compounded by regular droughts. Consequently, agricultural productivity in this region lags behind other wetter regions in Sri Lanka with 25% to 30% lower paddy yields and cropping intensities. This stress also impacts water availability for drinking and commercial users. This causes significant constraints for social and economic development which may be exacerbated in the future by anticipated population growth and climate change.

Historically, Sri Lanka has addressed these constraints by constructing many small cascade systems of reservoirs and transfer canals. In the 1960s, under MDP, the government decided to augment water within these systems with available water resources in the MRB using large transfer canals and reservoirs. The MRB is Sri Lanka's largest river basin, comprising 18% of Sri Lanka's area and providing 21% of the country's overall runoff. Over time, the government has revised MDP accounting for socio-economic changes and national development priorities. The government's current priorities and investment roadmap are described in the Mahinda Chintana for the irrigation and water resources sector. These focus on ensuring availability of adequate water quantities for irrigation; improving management, productivity and usage efficiency of water to meet rising demands; and minimizing spatial variations in water availability through implementing trans-basin diversions to divert available water to dry zone areas. The updated MDP will address the government's sector priorities constructing the North Central Province Canal Program (NCPCP), an outstanding investment component of MDP. NCPCP will be implemented in two sequential phases: Phase 1 will transfer water from MRB to existing reservoirs in the Central, North Central and North Western Provinces; and Phase 2 will extend the transfer of MRB water from the North Central Province reservoirs to existing reservoirs in Northern Province, and will eventually augment drinking water supplies to Jaffna and Kilinochchi. The investment program will implement Phase 1, comprising four investment projects:

(i) The Kaluganga-Moragahakanda Transfer Canal (KMTC) will convey up to 771 MCM of water annually between Kaluganga and Moragahakanda Reservoirs, both of which are under construction. The reservoirs will retain local runoff and Mahaweli River flow diversions before commanding downstream irrigation and water supply schemes. The length of the canal is 9 kilometers (km) and comprises about 8 km of tunneling.

(ii) The Upper Elahera Canal (UEC) will annually convey up to 974 MCM northwards from Moragahakanda Reservoir, along a 70 km canal (including about 20km of tunnels and 16 km of cut-cover conduits), to the existing Huruluwewa and Mannakattiya Reservoirs, which feed existing irrigation and water supply schemes.

(iii) The North Western Province Canal (NWPC) will annually withdraw 130 MCM from Dambulu Oya River and the existing Nalanda Reservoir to command new and existing irrigation and water supply reservoirs located throughout North Western Province via 80 km of new and upgraded canals including a new 700 meter (m) tunnel.

(iv) Minipe Left Bank Canal Rehabilitation (MLBCR), located downstream of the Mahaweli Hydro Power Complex on the Mahaweli River, will: (a) add upstream storage by heightening the headwork's weir by four meters to regulate generation inflows, and (b) rehabilitate the 76 km Minipe Left Bank Canal to improve conveyance and reliability of service to existing farmers.

Impact improved agricultural production and sustained economic growth in the North Central Province, Central Province, North Western Province and Eastern Province.
Project Outcome
Description of Outcome secured access to water resources for agricultural and drinking purposes in project areas
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

New and improved water conveyance and storage infrastructure constructed

Systems for improving water resources management and productivity developed

Multidisciplinary investment program management operational

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects The first tranche of the investment program is categorized A for environment in accordance with ADB s Safeguard Policy Statement (2009). Individual environmental assessments have been undertaken for the three projects. Environment impact assessments for the NWPCP and UECP, each categorized A, and an initial environment examination for MLBCRP are prepared. Since the investment program is time-sliced and implementation of all three projects will begin under the first tranche, the environmental assessments cover the entire investment program. All subsequent tranches will also be categorized A for environment.
Involuntary Resettlement The first tranche of the investment program is categorized B for involuntary resettlement impacts, based on identified involuntary resettlement impacts of the separate projects: the NWPCP is category B, while the UECP and MLBCRP are both category C. The resettlement framework for the investment program guides the formulation of resettlement implementation plans for the first and subsequent tranches. A resettlement implementation plan was prepared to address the involuntary resettlement impacts of the NWPCP under the first tranche.
Indigenous Peoples The preliminary work that the mission carried out and the environmental impact assessment study of the project areas that the consultants engaged by the EA already carried out, did not identify any settlement of Indigenous Peoples communities in the project areas.
Stakeholder Communication, Participation, and Consultation
During Project Design The main stakeholders include Ministry of Mahaweli Development and Environment (MMDE), the Department of Irrigation and the Mahaweli Authority of Sri Lanka in the project provinces, the farmers in the command areas who are the end users of the irrigation water and beneficiaries, and approximately 194 project affected families in the entire MFF who will need to be relocated to accommodate the new canals for water transfer. The MMDE is responsible for the project design. The project affected families will participate through consultations in the resettlement planning exercise.
During Project Implementation The primary stakeholders comprising the Ministry of Mahaweli Development and Environment, the Department of Irrigation and the Mahaweli Authority of Sri Lanka are already involved with the technical design of the project with due consideration for minimally affecting human settlements and increasing the area of the elephant habitat that the humans have encroached upon. The project affected families including the poor and the excluded, will be involved in the project design with reference to developing a resettlement framework and the resettlement planning exercise.
Business Opportunities
Consulting Services All consulting services will be carried out using ADB's Consulting Guidelines. Advance contracting will be used. Individual consultants were recruited to undertake the PPTA.
Procurement All procurement activities will be carried out using ADB's Procurement Guidelines.
Responsible ADB Officer Lance Gore
Responsible ADB Department South Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, SARD
Executing Agencies
Ministry of Mahaweli Development & Environment82, Sampathpaya, Rajamalwatte Road,
Battaramulla, Sri Lanka
Timetable
Concept Clearance 02 Apr 2014
Fact Finding 13 Nov 2014 to 26 Nov 2014
MRM 24 Mar 2015
Approval 24 Jun 2015
Last Review Mission -
Last PDS Update 03 Jun 2015

MFF Facility Concept

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 168.00 Cumulative Contract Awards
ADB 0.00 - 0.00 0.00 %
Counterpart 108.00 Cumulative Disbursements
Cofinancing 60.00 - 0.00 0.00 %

MFF Facility Concept 0088-SRI

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 621.00 Cumulative Contract Awards
ADB 453.00 - 0.00 0.00 %
Counterpart 108.00 Cumulative Disbursements
Cofinancing 60.00 - 0.00 0.00 %

Evaluation Documents

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