World Bank $55 million loan to develop Jaffna

The World Bank this week approved a $55 million loan to Sri Lanka to improve urban services, preserve cultural and environmental assets, and improve livability in Jaffna, adding the city to an existing project to develop Galle and Kandy.

The loan will add development of rapidly urbanizing Jaffna to the existing Strategic Cities Development Project (SCDP), which is supported by the World Bank and was originally approved in 2014, according to a bank media release.

“Well planned cities can be centres of innovation and job creation as experienced in many parts of the world and this is an opportunity for Sri Lanka to connect people to prosperity,” said Françoise Clottes, World Bank Country Director for Sri Lanka and the Maldives. “There is substantial potential for economic growth in Jaffna, now that peace has returned. An improved urban environment is a favorable habitat for the developing enterprises that one day will become the engines of growth.”

A recent World Bank study, “Sri Lanka: a Systematic Country Diagnostic (SCD)”, identifies Jaffna as a rapidly growing, single-city agglomeration in the Northern Province of Sri Lanka. In the post-war era, the city has seen rapid growth and urban expansion and there are significant demands for improved municipal services. As communicated during recent consultations, the people of Jaffna see a priority in improving city functions and livability while preserving cultural heritage.

Guided by consultations with Jaffna’s citizens, the project will attempt to improve the road network and rehabilitate the drainage system while preserving the city’s ponds, which have played an important role in flood management and which could be key to climate change adaptation. In addition, the project aims to preserve cultural heritage assets such as public spaces and parks as well as encourage cycling as a means of reducing emissions.

"Building trust among citizens and service providers is a challenge and an outcome we hope to achieve through the additional finance support to Jaffna through this project,” said Zhiyu Jerry Chen, World Bank Senior Urban Development Specialist and Task Team Leader of the project. “A City Stakeholder forum will be used under this project for improved and continued citizen engagement to closely collaborate with the service providers in ensuring the project investments are put to profitable use for the people of Jaffna,” he said.

Financing for this project is provided by the International Development Association (IDA), the World Bank’s grant and low interest arm, with a maturity of 25 years that includes a grace period of 5 years. The Ministry of Megapolis and Western Development is the lead responsible agency for the implementation of this project with active participation from Jaffna Municipal Council and other implementation partner agencies.