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| Friday, 5 November 2004 |
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| Lanka first recipient of funds under new scheme: Rs.25 billion from Japan for three development projects by Manjula Fernando Sri Lanka will receive the first preferential loan of Rs.25 billion from Japan under a new scheme dedicated to promoting world peace. This 'highly concessionary' loan which comes with a 10 year grace period and a 40 year repayment period at an annual interest of 0.75 per cent will cover three development projects to be implemented under the government's economic development initiatives. They are small scale infrastructure rehabilitation, small and micro industries and entrepreneur promotion and environmentally friendly solution projects which target the entire rural sector development including in the war torn North and East provinces. The agreements were officially exchanged between Japanese Ambassador Akio Suda and Finance Minister Dr Sarath Amunugama at the Treasury yesterday. After the exchange, Minister Amunugama said the selection of Sri Lanka as the first recipient for this highly concessionary loan was a tribute to the Government's efforts for peace building and economic development. Referring to the upcoming 2005 Budget the Minister said its "timing was perfect". "We have identified that economic growth is very closely linked to peace," the Minister said adding that President Kumaratunga has placed peace on the very top of her agenda. He said the North and East provinces were very much part of the government's development program and the Japanese funds will cover the North-East rehabilitation projects as well. "This is a highly concessionary and an untied loan which signifies Japan's genuine commitments and signifies their fight for beneficiary-friendly loans among the donor community," the minister said. He thanked the Japanese Ambassador personally for his keen interest in increasing development assistance to Sri Lanka. The loan has come through following a recent trip to Tokyo by the Finance Secretary to brief Japanese authorities of the Government's comprehensive economic policy framework which defines its future economic strategy in detail. Expressing its commitment for economic growth and the peace process, Ambassador Suda said Japan expects the Government and the LTTE would soon reach a consensus on resuming negotiations. "We urge all parties concerned to stop violence and inhuman killing," he said. Japan's ODA assistance has so far targeted a wide range of activities including improvement of economic infrastructure, economic sector reforms, poverty alleviation, regional development, human resources development, avenues for foreign currency earnings and post conflict rehabilitation. Japan is Sri Lanka's largest single donor. Of the full loan package Rs.11,548 million will be allocated for small scale infrastructure rehabilitation and upgrading project II. This will assist the upgrading of national and provincial hospitals, schools, vocational institutes, construction of economic centres. Another Rs.9,433 million will be used for small and medium industries development through the provision of special low interest loans up to 10 million. Thirdly, Rs. 5 billion will be used to implement the second phase of the e-Friend project that proposes to give low interest credit facilities to mitigate environment problems in the manufacturing and service sectors. Treasury Secretary Dr. P.B. Jayasundara, JEBIC Chief Representative S. Ejima, First Secretary K. Iwashita of the Japanese Embassy and Director General of External Resources Sujatha Cooray were also present. |
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