Asian Development Bank approves $100 million loan for Sri Lanka

New Delhi: The Asian Development Bank (ADB) has approved a $100 million policy-based loan to support Sri Lanka's water supply and sanitation sector reforms.

The ADB on Wednesday stated that the approved loan will help to enhance the country's resilience to climate change impacts and promote long-term sustainability.

It further highlighted the Water Supply and Sanitation Reform Program, composed of two subprograms of USD 100 million each. It will contribute to a more resilient and sustainable delivery of water supply and sanitation services.

As per the ADB, subprogram 1 will establish policies and strategies nationally and for the National Water Supply and Drainage Board (NWSDB), while subprogram 2 will support the implementation of reform actions and guidelines.

"Efficient delivery of safe and reliable water supply in Sri Lanka is limited by fragmented water resources management and exacerbated by climate change. This program will not only strengthen mechanisms to ensure adequate access to safe water but also address governance and sustainability challenges of the sector that will enable the participation of the private sector," said Pedro Almeida, Senior Urban Development Specialist.

The water resources management in Sri Lanka is facing longstanding challenges such as unbalanced allocation between agriculture and drinking water, inadequate climate change consideration in planning and development, involvement of several agencies at the national and regional level, and impacts from unplanned land use and deforestation.

As per the ADB, the program comes with USD 800,000 of technical assistance grant that will provide capacity and advisory support to the Ministry of Water Supply and Estate Infrastructure Development's (MWS) and NWSDB for the formulation, deployment, implementation, and monitoring of the reform initiatives in the next subprogram.

ADB's Technical Assistance Special Fund will also cover USD 500,000 of the amount, while the Water Innovation Trust Fund, under the Water Financing Partnership Facility administered by ADB, will finance USD 300,000.

ADB was established in 1966 and it is owned by 68 members, 49 are from the region.