Announcement of IDA Lends Thirty-Three Million Two Hundred Thousand US Dollars in Sri Lanka in Fiscal 1977 on September 19, 1977

H.OLD FOR RELE.ASE _. . . (" •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 For Publication Monday, September 19, 1977 SRI LANKA AND THE WORLD BANK IDA LENDS $33.2 MILLION IN SRI LANKA IN FISCAL 1977 Sri Lanka received $33.2 million from the International Development Association (IDA), an affiliate of the World Bank, during the fiscal year ended June 30, 1977, according to statistics released by the World Bank. The Associ- ation's credits are for 50 years, including ten years grace free of interest, but carry a service charge of 3/4 of 1%. World Bank/lDA Global Commitments During the fiscal year 1977, the Bank and IDA committed a total of $7,067 million for development projects in 74 countries. Of this total, • $1,164 mill ion (or 16.5%) went to six countries in South Asia -- Bangladesh, Burma, India, Nepal, Pakistan and Sri Lanka. Bank Activities in Sri Lcinka in Fiscal 1977: The year's lending in Sri Lanka places special emphasis on increasing foodgrain production -- an important theme of both Sri Lanka and the Bank. A credit of $19 mill ion is assisting the second stage of the Mahaweli Ganga pro- ject and a ~redit of $5 million is for a project designed to rehabilitate and modernize the country's traditional tank irrigation system. The third credit of $9.2 million is devoted to improving water supply in Colombo, the capital, and adjacent towns. A number of countries -- Canada, the Netherlands, the United Kingdom and the United States -- are joining IDA in providing funds on con-. cessional terms to two of the projects. $19 Million for the M~haweli Ganga Project - Second Stage Sri Lanka is implementing a priority agricultural development pro- ject -- the Mahaweli Ganga Development -- with the assistance of an IDA credit of $19 mill ion. Four member governments -- Canada, the Netherlands, the United Kingdom and the United States -- are providing an additional $23.2 million for the $100.5 million project. The Mahaweli is Sri Lanka's largest river, draining an area of 4,000 square miles. The project covers a contiguous area of 106,000 acres and in- • cludes the construction of irrigation works and land settlement, support services including agricultural extension, access roads, social services and technical assistance. I . .. NOTE: Money figures are expressed in US dollar equivalents.  - 2 - The Master Plan for the Mahaweli Development was formulated in 1968 by Sri Lanka, with assistance from the United Nations Development Programme. ~ (UNDP). The Bank and IDA provided $29 million for the first stage of the scheme. This is now almost complete. At full development in 1986, the second stage of the project will bring major benefits to Sri Lanka's economy. The annual increase in production resulting from the project is estimated at 42,300 tons of foodgrains; 1,100 tons of chillies; 3,800 tons of oil seeds and 3,600 tons of vegetables. This in turn will help Sri Lanka save about $8 million in net foreign exchange an- nually. The project is expected to generate about 12,000 full-time jobs in agriculture, and about 9,000 man-years of non-farm employment in marketing, transport and processing. $5 million for Modernization of Irrigation The credit is assisting Sri Lanka in financing the modernization of its traditional tank irrigation and drainage system. The United Kingdom is contributing $6 mill ion as grant to help finance the project. The $30 million project will provide for the modernization of five tank irrigation schemes -- smail reservoirs with earth-filled dams, typically with a storage capacity of a few thousand acre-feet -- in the north-central dry zone of the country, serving some 32,000 acres. At full development, the project will help increase agricultural production -- rice, cereals and pul- ses -- by more than 22,000 tons. This will contribute an estimated annual net foreign exchange savings of $4 million. The project will also help to • increase employment opportunities in the rural areas and would directly benefit about 10,000 small farmers operating about three acres each. $9.2 Mill ion for Water Supply Canada joined IDA in providing $14 million on concessional terms to help finance a water supply project. IDA extended a credit of $9.2 mil- lion. A second credit of $4.8 mill ion coming from Canadian funds being administered by IDA. Water supply in Colombo, the capital, and adjacent towns is in- adequate. The $42.5 million project, when completed in 1981, will help provide a 24-hour daily service to 1.2 million consumers in Colombo and five adjacent towns to the south of the capital. In addition, safe water supply will be provided to 410,000 new consumers in towns north of Colombo and in Kalutara and Ambalangoda. The poorer sections of the community which is presently suffering from a water shortage and unsafe quality of water, will get an improved and adequate water supply through standpipes. The health and welfare of the people will be improved and a constravnt to the growth of industry, commerce and tourism will be removed. - 0 - •