Sri Lanka signs MoU with India for development projects with grant assistance
Sri Lanka and India have reportedly signed a Memorandum of Understanding (MoU) to implement High Impact Community Development Projects (HICDP) under Indian grant assistance.
The extension of the ongoing MoU on HICDP for another five years had been announced during the Virtual Bilateral Summit between Indian Prime Minister Narendra Modi and Sri Lanka’s Prime Minister Mahinda Rajapaksa on 26 September and the MoU was signed today by High Commissioner of India Gopal Baglay and Treasury Secretary S.R. Attygalle, the Indian High Commission in Colombo announced.
The signing of the MoU was carried out in the presence of Prime Minister Rajapaksa.
Under the HICDP a total of 64 projects, using a total outlay of approximately Rs. 20 billion as aid from the Government of India, have been implemented in Sri Lanka.
As per the framework of the MoU for the third phase that was signed recently, individual developmental projects costing up to Rs. 300 million in social sectors such as health, education, water, sanitation, agriculture etc., can be taken up in Sri Lanka.
According to the Indian High Commission, the total outlay of all such projects at any given time can be up to Rs. 5 billion.
It had been also agreed during the Virtual Bilateral Summit to deepen and broad-base the HICDP projects currently undertaken in each of Sri Lanka’s 25 districts.
These projects shall relate chiefly to socio-economic development, livelihood support, conservation of environmental and cultural heritage, empowerment of women, child welfare, and facilitation of community life, particularly through the creation of infrastructure in the education, health, agriculture or community development sectors.
The Ministry of Finance is the nodal ministry for implementing the HICDP scheme on the Sri Lankan side.
Presently, 21 projects covering all provinces – Northern, North-Central, North-Western, Western, Southern, Central, Uva, Sabaragamuwa and Eastern – are being undertaken under the MoU.
They include construction of primary schools and colleges, vocational training institutes, universities, hospitals, rural sanitation, cultural heritage, rainwater harvesting, social housing for the poor, agricultural warehousing, tourism and civil aviation infrastructure support.
OSL take:
Sri Lanka and India have close historical ties that have resulted in strong bilateral and trade ties. Sri Lanka and India also enjoy an operational free trade agreement and is currently working on finalising an economic and trade agreement that would further enhance business/trade ties between the two countries. Indian businesses/investors could explore business/investment opportunities in Sri Lanka and vice versa. Also, other foreign businesses/investors interested in doing business with India could explore the possibility of setting up base in Sri Lanka to engage with India.