Loans US$ 500mn to upgrade transport connectivity

Sri Lanka’s efforts in improving transport connectivity will pick up pace with the World Bank (WB) having approved last week a US$ 500 million financing.

The Executive Directors of the WB on Friday (October 1) approved the loan for

Sri Lanka to provide safe, climate-resilient roads to connect agricultural supply chains through the Inclusive Connectivity and Development Project.

The US$ 500 million financial assistance is provided by the International Bank for Reconstruction and Development (IBRD) and has a final maturity of 28 years including a grace period of 10 years.

The project is expected to benefit around 16 million people living in rural communities in selected districts of the country.

“Improving access to basic services and economic opportunities in rural areas, and reducing regional disparities in economic development, is critical for promoting inclusion and opportunities for all.

“The project will also create many shortterm employment opportunities, which will help advance the post-pandemic recovery,” said WB for Maldives, Nepal, and Sri Lanka Country Director Faris Hadad-zervos in a statement to the media commenting on the financial assistance extended.

Implemented by the Ministry of Highways and a National Steering Committee that will be established to oversee the project, the development effort will build on the ongoing provincial and rural roads rehabilitation initiatives under the WB financed Transport Connectivity and Asset Management Project and the Asian Development Bank-funded Integrated Road Investment Programmes – iroad I and II.

According to WB Task Team Leader of the Project Winnie Wang, the project will help develop green and climate-resilient transport and agricultural logistics, and mainstream climate resilience practices in infrastructure planning and investments for a more resilient future for Sri Lanka.

In Sri Lanka, roads carry around 95 percent of passengers and 98 percent of cargo. While nearly all national roads are paved, only 67 percent of provincial roads, and 13 percent of rural roads are in good condition.

Sri Lanka also has the highest rate of road fatalities in South Asia with around 3,000 deaths per year. An uninterrupted road network is crucial to link rural communities to health and education services and other economic opportunities, and to connect small-holder farmers to domestic and international markets.

This project is part of the development programme to improve 100,000 km of rural roads, a key initiative under the government’s national development strategy.