India yesterday signed an agreement with Sri Lanka to undertake a project to rehabilitate the Atchchuvely Industrial Zone (AIZ) in Jaffna district of the Northern Province.

The project was undertaken as a part of India's development partnership with Sri Lanka and in response to requirements projected by the Sri Lankan government, a press statement issued by the Indian High commission in Colombo said.

High Commission of India with its project implementation partner, the United Nations Office for Project Services (UNOPS) signed the agreement today in the presence of Minister of Economic Development Basil Rajapaksa, Minister of Traditional Industries and Small Enterprise Development Douglas Devananda, and High Commissioner of India Ashok K. Kantha.

The project, to be implemented under a US$ 1.7 million (Rs.192 million) grant from India, will build required infrastructure and utilities at the AIZ to assist potential investors to commence business ventures.

Initially, construction of access roads, internal roads, water supply system with treatment plant, power supply, sewerage and waste disposal system as a part of the requisite infrastructure will take place in a 25-acre area of the AIZ.

Once completed, the development is expected to boost to economic activities in the Jaffna Peninsula and provide both direct and indirect employment for about 2,000 people.

The project will help to attract significant investments to increase production in textiles, plastic and leather products, food processing, agro-based industries, oil and fibre products among others using local resources.
The Ministry of Traditional Industries and Small Enterprise Development will implement the project with the technical expertise and project management services by the UNOPS. The Sri Lankan government is already carrying out preliminary site preparation work at the AIZ.

"The project will be completed in a period of 14 months and it will provide a platform for industrial development of the region, for regeneration of livelihoods and for restoration of normalcy in Northern Province," the High Commissioner of India said.
Minister Rajapaksa thanked India for undertaking this project as well as for all the assistance provided for reconstruction and development of Northern Province through various others projects.

He expressed hope that the AIZ when completed will create employment opportunities for people in Northern Province and encourage investors, both local as well as from the diaspora.