The Asian Development Bank (ADB) has pledged a Rs. 11.2 billion loan to Sri Lanka, Finance and Planning Ministry said in a press release issued yesterday.

The following is the full text of the press release.

"The Country Program Confirmation Mission of the Asian Development Bank (ADB) visited Sri Lanka from 7-17 November 2000, to discuss loan and technical program for 2001 based on the country performance and ADB’s country and sector strategy. The Mission had extensive discussions with officials of the Government and its agencies and also met with representatives of major multilateral and bilateral donors and the private sector. The Wrap-up meeting was held on 16 November 2000, chaired by Dr. P. B. Jayasundera, Secretary, Ministry of Finance and Planning, and a Memorandum of Understanding was signed between the Mission and the Government.

ADB’s current country operational strategy for Sri Lanka aims to assist the country reduce poverty and achieve sustainable higher level of economic growth by supporting: (i) policy and institutional reforms to promote private sector development and improved public sector management; (ii) human development to address the gap in marketable skills and thereby improve employment and income levels; (iii) enhancement of the country’s infrastructure through public and private investment; (iv) preservation of the country’s natural resources base; and (v) measures to mitigate the social and environmental impact of the transition to a higher growth path.

ADB is currently undertaking a poverty analysis for Sri Lanka, based on the Government’s Framework for Poverty Reduction. The poverty analysis will be discussed with major stakeholders at a high level forum to be held in January/February 2001. Based on the discussion at the high level forum, ADB’s current country operational strategy will be fine-tuned to be more focused, aiming to match the ADB’s experiences and capacities with the country’s needs for poverty reduction and the ending of the civil conflict. In line with the above strategic considerations, the 2001 loan and TA program aims to support in policy reforms, institutional capacity building, and investment finances in key sectors including agriculture and natural resources, energy, transport, industry and finance, and social infrastructure. The loan and TA program also address specific governance issues and provide direct assistance to the north and east to assist the Government in its program to build social cohesion and peace process in the country.

The proposed lending program for 2001, which including five firm projects and one emergency assistance project, amounts to $240 million ($140 from Asian Development Fund (ADF) and $100 million from Ordinary Capital Resources (OCR), excluding the emergency assistance). It will include:

(i) Southern Province Rural Economic Advancement (Sector);

(ii) Road Sector Development Program;

(iii) Power Sector Development Program;

(iv) Small-Medium Enterprise Support for Employment Generation and Poverty Reduction;

(v) Engineering Loan for Colombo South Harbor Development; and

(vi) Emergency Assistance for Rehabilitation of North and East.

"The 2001 TA program will comprise 11 TAs that are estimated to require $8.25 million for ADB financing. The TA program accords equal priority to project preparatory TAs and advisory TAs, aiming to help sustain a robust pipeline of quality projects for ADB financing and meanwhile, providing support for institutional capacity building for improved management efficiency, policy reforms to promote private participation in infrastructure development, and good governance."