ADB pledges US$610mn in financial assistance
[16 Mar 2000]

The Asian Development Bank (ADB) has pledged concessionary financial assistance of US$610mn to Sri Lanka, due at least in part to what the ADB described as the satisfactory portfolio achieved in the period 1997 to 1999.

The huge financial assistance would be covering 15 projects from 2001 to 2003. It also aims to assist the country to reduce poverty and achieve a sustainable higher level of economic growth by supporting policy and institutional reforms, human development, basic infrastructure and environment and natural resources conservation.

The Bank also expressed confidence that the country's economy could achieve a higher 5% growth this year and further by 6% the year after.

"We forecast Gross Domestic Product (GDP) growth this year to be 5% and 6% next as against an estimated 4% growth in 1999," said ADB Economist Seung Beom Koh, who is currently in Sri Lanka with an ADB Country Programming Mission. 

Mr Seung said that a faster recovery in the economy would also boost imports.

Until 1999, Sri Lanka was enjoying 100% assistance from the Asian Development Fund (ADF) but since the country's per capita income has been on the rise, Sri Lanka had been upgraded to a category termed as "B1" under which it has to tap the OCR facility by reducing reliance on ADF.

ADB's new Resident Representative John R. Cooney said that Sri Lanka was one of the best aid utilizing countries and efforts were under way to further increase utilization and management.

Some of the specific activities in the forthcoming program include greater measures to boost private sector development through privatization, restructuring of the energy sector, reforms and governance in the financial sector, labour market reforms etc,.

"In the past Sri Lanka's performance has been satisfactory and we hope that it will be sustained if not further improved to enjoy the robust pipeline of assistance pledged," said the leader of the Country Programming Mission Ms. Hua Du.

ADB officials said that in line with its overarching objective of poverty reduction, an important feature of the lending program was the inclusion of projects with scope to maximise poverty impact.

Since poverty was most prevalent in the rural areas, the ADB and the government will enter into a poverty reduction partnership later this year.

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