Cabinet granted approval to a memorandum submitted by President Mahinda Rajapaksa in his capacity as the Minister of Finance and Planning, to enter into a grant agreement with the Government of the Netherlands for a sum of Euro 19,656,418 to finance the augmentation and rehabilitation of the Negombo Water Supply Scheme.

The Government of the Netherlands has agreed to finance the project under its Development Related Export Transaction (ORET). Of the Contract sum of Euro 36,330,181 the Netherlands Government will provide 54% of Euro 19,656,418 and grant funding under this Programme. The balance amount of Euro 16,673,763 will be provided by ING Bank N.V. of the Netherlands.

The proposed project will involve the construction of a water treatment plant with the capacity to process 12,000 cubic meters per day, two ground reservoirs with capacities of 3,000 and 1,500 cubic meters, laying of 15.5 km long transmission mains, new distribution system to Kochchikade and Duwapitipana, improving the existing distribution system, supply and installation of pumps and equipment. The total number of new connections to be provided under the project is 50,000.

The project will be implemented by the National Water Supply and Drainage Board.