Rs. 4,025 million aid for Kalu-Ganga Project

A loan agreement has been signed today in Colombo between the Democratic Socialist Republic of Sri Lanka and the Kuwait Fund for Arab Economic Development.

The Fund will grant a loan of 10 million Kuwaiti Dinars (equivalent to about Rs. 4025 million or US$ 35 million) to assist in financing of the Kalu-ganga development project.

The loan would mature over a 26-year period, including a six-year grace period, which would start from the date on which the first disbursement or commitment is made under the loan, and will be repaid in 40 semi-annual installments, with a 1.5 per cent annual interest plus a loan administration fee at an annual rate of 0.5 per cent.

The Kalu Ganga development project is a part of the Mahaweli Development Program. The main objectives of the project are to increase irrigation and drinking water supplies, open up new lands for agriculture and increase cropping intensity in existing irrigation area in the Kalu Ganga Basin and thereby increase food production and drinking and industrial water availability which will improve the standard of living of people in Matale, Anuradhapura, Polonnaruwa and Trincomalee districts.

Main components of the project are the construction of a 67-metre high dam across Kalu-ganga at Pallegama, a 13 km long transfer canal including a three km tunnel to transfer water from the proposed Kalu-ganga reservoir to the proposed Moragahakanda reservoir and a seven km long tunnel from Bowatenna reservoir to Lenadora, upgrading the existing 33 km long Huruluwewa canal and extension of the Yan Oya canal with a total length of 7.4 km and the Eru wewa canal with a total length of 7 km.

The loan is the eleventh loan to be made by the Kuwait Fund for Arab Economic Development to Sri Lanka, as the Fund has previously provided 10 loans to Sri Lanka to assist in financing projects in various sectors with a total amount of approximately KD 40 million.

The Fund has also provided technical assistance in the tune of KD 537,000 to finance feasibility studies of the two projects, namely the Moragolla Hydro Power Project and the Moragahakanda Development Project.

The loan agreement was signed by Sumith Abeysinghe, Secretary, Ministry of Finance & Planning on behalf of the Government of Sri Lanka and Ghanem Sulaiman Al-Ghenaiman, Deputy Director General, Kuwait Fund for the Arab Economic Development on behalf of the Kuwait Fund for Arab Economic Development.