The Japan Bank for International Cooperation (JBIC) has signed loan agreements for the 36th annual ODA loan package, totaling Y26.631bn (US$255mn), with the government of Sri Lanka.
This loan is in line with JBIC’s medium-term strategy for overseas economic cooperation operations, which prioritises economic infrastructure development, private sector development, assistance for the poor and social development.
The 36th ODA loan package has three main areas of focus, the first providing assistance for peace-building efforts. After an indefinite ceasefire was agreed in February 2002 between the government of Sri Lanka and the Liberation Tigers of Tamil Elam (LTTE), a number of peace building, reconstruction and development efforts have been undertaken.
All three projects in the package cover northern and eastern regions whose progress has suffered due to the 20-year-long civil conflict. Preferential terms for peace building, initiated by the Japanese government this year, will be applied for the first time.
The second project aims to support poverty reduction through social sector development.
Development finance support will be extended to small and micro industries to promote environmental considerations. The small and micro industries leader and entrepreneur promotion project (III) and the environment friendly solution fund project (II) will provide two-step loans to SMEs, via financial intermediaries in Sri Lanka, in support of their capital investment activities. These two projects will also encourage SMEs to take environmental considerations into account.