ADB and World Bank support Sri Lankan infrastructure
Development banks have poured money into trade and energy infrastructure in Sri Lanka in a series of separate financings.
The World Bank issued a US$125mn loan for road projects under the government’s transport connectivity and asset management project. The loan will fund the improvement of the road corridor between Ja-Ela to Chilaw on National Highway A003.
The debt has a maturity of 25 years, with a five-year grace period. According to the World Bank, it will seek to use the loan to secure its first PPP in the Sri Lankan roads sector. The debt was approved in 2016, but released this week. The project will complete in 2026.
Meanwhile, the Asian Development Bank (ADB) is to provide US$50mn to improve Sri Lanka’s rooftop solar energy network. The loan will help the government reach its targets of 200MW of solar by 2020 and 1GW by 2025. Currently, Sri Lanka is reliant on fossil fuels for 67.2% of its energy generation.
“This dependence on carbon-emitting energy sources makes Sri Lanka vulnerable to fluctuating fuel prices, while hampering the government’s efforts to reduce greenhouse gas emissions by 20% as part of its commitment to the Paris agreement,” the ADB says in a statement.
“Sri Lanka’s energy sector has made tremendous progress over the last two and a half decades in bringing electricity to almost everyone in the country,” says Mukhtor Khamudkhanov, the ADB’s principal energy specialist. “But there is a need to diversify the country’s energy mix toward more renewable and sustainable sources.”
The total project cost is US$59.8mn, with the rest of the money coming in the form of private sector equity investment. The project will finance 50MW of solar rooftop projects in Sri Lanka. The ADB will also make US$1mn available for technical assistance.take me back