ADB Doubles Funding for Sri Lankan Highway

News Release | 10 March 2008

MANILA, PHILIPPINES - The Asian Development Bank (ADB) is doubling its funding commitment for a major highway project in southern Sri Lanka that will promote economic growth.

The Southern Transport Development Project was initially approved in 1999, with ADB extending a $90 million loan. ADB will now provide a second $90 million loan to ensure completion of the highway and to expand its design to four lanes from two to accommodate increased traffic. The supplementary loan also includes funding to purchase road safety equipment.

Additionally, ADB will provide a $300,000 grant to prepare a long-term land use and development plan along the highway with particular focus on the 1.5 kilometers on each side.

"Traffic volume between the southern region and Colombo has increased significantly since the project was first approved, and it remains one of the Government's priorities," said Dewi N. Utami, Senior Environment Specialist of ADB's South Asia Department. "The project will greatly reduce travel time and promote easier movement to and from the southern areas to Colombo, which should increase economic activity."

Poor transport links with other parts of the country, in particular with Colombo and the economically dominant western region, have constrained economic development in the south.

The project involves the development of approximately 128 kilometers of highway linking the national capital of Colombo with Matara and Galle, important district capitals on the southern coast.

The portion of the highway funded by the original ADB loan covered around 65 kilometers of a two-lane highway. The length of the highway funded by ADB has been reduced under the supplementary loan to around 35 kilometers but widened to four lanes.

Other financiers of the highway project are the Government of Sri Lanka, Japan Bank for International Cooperation, the Nordic Development Fund, and the Swedish International Development Cooperation Agency.