ADB Provides $150 Million Emergency Loan to Sri Lanka | Asian Development Bank

ADB Provides $150 Million Emergency Loan to Sri Lanka

News Release | 15 April 2010

MANILA, PHILIPPINES - The Asian Development Bank (ADB) is providing $150 million in emergency loan to the Government of Sri Lanka for projects which will support reconstruction of urgently-needed infrastructure, restore essential services and revive livelihood opportunities for people in war-affected regions.

The loan is part of the wider assistance being extended by ADB and other development partners to support resettlement and rehabilitation of thousands of internally displaced persons (IDPs), particularly in the war-ravaged Northern Province, and also in areas in the Eastern Province and North Central Province which have been affected by the conflict.

For nearly three decades, Sri Lanka was torn by internal armed conflict, with infrastructure destroyed, access to basic social services disrupted, and livelihood of people severely affected. Following the end of the conflict in May 2009, the Government has begun undertaking the difficult process of resettling some 277,000 IDPs. According to latest government estimates, about 80,000 IDPs are still to be resettled in their original places of residence.

ADB has participated in three fact-finding missions to the conflict-affected areas and also held extensive discussions with government officials at various levels to determine the nature and extent of assistance that could be provided to IDPs.

"ADB's assistance will expand and strengthen the reconstruction of urgently needed essential economic and social infrastructure and administrative services, and create livelihood and sustainable employment opportunities in the war-affected area," said Richard Vokes, Country Director of ADB's Sri Lanka Resident Mission.

The sub-projects, which are expected to be completed by 2013, will complement ADB's ongoing development work in the conflict-affected areas for the last several years. ADB is currently contributing to efforts to rehabilitate IDP communities in the northern and eastern parts of the country through a range of projects such as repairing damaged schools, hospitals and roads, and providing tractors to farmers' cooperatives and livelihood grants to IDP families.

The emergency loan will be sourced from ADB's ordinary capital resources. It will have a 32-year term, including a grace period of 8 years and an annual interest rate based on ADB's London interbank offer rate-based lending facility. The government of Sri Lanka will provide $18.24 million for the project.