Over US $ 90 m from ADB:

North on rapid overhaul track

Water supply and sanitation top priority:

The Asian Development Bank (ADB) will provide $90 million in loans to help Sri Lanka restore water supply and sanitation infrastructure to the conflict-affected Northern Province.

The funds will help rehabilitate and expand water and sanitation infrastructure in target areas of the Jaffna Peninsula.

"The government recognizes the project as a key part of its reconstruction program for the Northern Province, and the impact will improve health and human development in urban areas of the Jaffna Peninsula for both current residents and returning internally displaced people," said ADB's South Asia Department Safeguards Specialist Ricardo Barba.

"Providing these basic needs will complement government efforts to achieve the Millennium Development Goals," said Barba.

The project will rehabilitate and improve reservoir headworks, and construct a water treatment and distribution system serving the Jaffna and Kilinochchi Districts.

Support will be given to the Jaffna Water Resources Management Committee to carry out a study and to draw up a comprehensive, integrated water resources management plan. Assistance will also be given to other resource bodies and local authorities, to develop groundwater quality and quantity monitoring and management systems, and to conduct public conservation, environmental protection and hygiene awareness campaigns.

A technical assistance grant of $600,000 from ADB's concessional Technical Assistance Special Fund will be used for a needs assessment and to establish training courses on service delivery for relevant agencies and local authorities. The Government will finance $65,000 equivalent to a total cost of $665,000.

The loan finance includes a 25-year, $20 million loan from ADB's ordinary capital resources with a six-year grace period, and an annual interest rate set in accordance with ADB's LIBOR-based lending facility. A second loan of $70 million equivalent from ADB's concessional Asian Development Fund has a 32-year term, including a grace period of eight-years with an annual interest charge of 1 percent, rising to 1.5 percent for the balance.

Agence Francaise de Development is expected to provide $40 million equivalent and the Government will provide over $34 million, for a total investment cost of $164.04 million.

The project, which is due for completion by February 2017.