US$ 350mn loan to develop rural roads and implement a 100MW wind power plant in Sri Lanka
Sri Lanka’s Ministry of Finance and Mass Media has reportedly entered into two loan agreements with the Asian Development Bank (ADB) to borrow US$ 150 million for the development of 3,400 km of rural roadways and US$ 200 million for the implementation of 100 MW Wind Power Generation Project in Mannar Island
The government’s economic policy statement notes the development of the rural economies as one of the priorities to achieve sustainable development of the country.
An increased investment on rural infrastructure development to uplift the livelihood of people living in rural areas has therefore being given priority by the government.
According to reports, a total of 3,400 km of rural access roads inclusive of 340 km of national highways will be upgraded under the agreement signed yesterday for the Second Integrated Road Investment Programme.
The significance of this road project is that these roads will be developed to suit all weather conditions and will improve 340 km of national roads with the aim of building up better connectivity between rural communities and socio economic centres.
Improving the capacity of road agencies with respect to safeguards, road safety, maintenance, research capacity and road design and construction is another component of the program. The programme is to be implemented in Northern, Eastern, Uva and Western Provinces.
Under the first phase of this programme 3,108 km of rural access roads and 248 km of national roads in Southern, Central, Sabaragamuwa, North Western, North Central Provinces and Kalutara District in Western Province are being improved and maintained. The total investment cost of the first tranche of this project is US$ 172.1 million.
The ADB provides US$ 150 million and the Government Contribution will be US$ 22.1 million.
The implementation of the Wind Power Generation Project will support the government’s objective of achieving 20% of the total power generation through non-conventional power generation by 2020 by enhancing clean power generation.
A 100 MW wind farm will be constructed in Mannar Island of the Northern Province under the proposed project. In addition, the wind park infrastructure will be developed including Wind Park’s internal medium voltage infrastructure, internal cabling and access roads; establishment of a renewable energy dispatch control centre for the forecasting, controlling and managing intermittent 100 MW wind power generation.
The total investment cost of this project is US$ 256.7 million of which US$ 200 million will be provided by ADB as a direct loan to CEB under a Treasury Guarantee. The balance US$ 56.7 million will be financed by CEB.
OSL take:
The US$ 350 million ADB loan to develop rural roads and build a 100MW wind power plant has created opportunities for interested parties to look at securing the projects. The projects also indicate the Sri Lankan government’s interest in developing connectivity within regions as well as promote sustainable energy generation. Therefore, opportunities for investments have opened up in these sectors.
| Article Code : | VBS/AT/04122017/Z_3 |