The Japan Bank for International Cooperation (JBIC) has signed ODA agreements of up to ¥39.233bn (about US$327mn) for three projects with the government of Sri Lanka. This loan addresses the major development challenges of a 10-year development framework issued by the government. These objectives and policies for socio-economic development were discussed at the Development Forum held in Sri Lanka last January.

The framework, which aims to accelerate growth while maintaining macroeconomic stability, prioritises the need for a country-wide infrastructure. This includes road networks, water supply and sewerage systems, reducing poverty and pursuing growth-oriented development to achieve the Millennium Development Goals. The framework also aims to develop northern and eastern regions where development has suffered due to a 20-year conflict.

Regional disparities have been increasing every year in India. Poverty remains high in rural areas and its infrastructure falls behind that of urban areas. The ‘Pro-Poor Rural Development Project’ will improve road infrastructure development in the Eastern province, to increase access to markets and social services and reduce poverty. The project sites and sub-projects have been selected according to the region’s needs and priorities and training for local authority staff is included.

Road development, which is crucial to Sri Lanka’s socio-economic activities, has failed to keep up with an increasing volume of traffic, including the road network linking Greater Colombo with key regional cities. The “Greater Colombo Urban Transport Development Project “aims to relieve road congestion around Colombo, the capital city, and improve connections among regions by building an outer circular highway in the outskirts of Colombo.

Population with access to water remains low at 30% (2005) in Sri Lanka. In particular, the capacity of current water supply systems in Greater Colombo and Greater Kandy does not fulfil the increasing demand for water from the growing population. There is therefore an urgent need to fill the gap between demand and supply.

A sewerage system only exists in Greater Colombo with less than 3% of the population being served with sewerage systems and, in other regions, untreated sewage is discharged into rivers and the sea. The “Water Sector Development Project “will support the construction of water supply facilities in Greater Colombo and Greater Kandy as well as the basic design of a Greater Kandy sewerage system. The project will help to expand the water supply and sewerage/sanitation facilities so helping to improve living conditions.