Announcement of Sri Lanka Expands Mahaweli Ganga Irrigation Program on June 11, 1984

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 84/92 Contact: Pushpa N. Schwartz June 11, 1984 (202) 477-3293 SRI LANKA EXPANDS MAHAWELI GANGA IRRIGATION PROGRAM About 100,000 people are expected to benefit from a project that will provide irrigation facilities on the right bank of the Maduru Oya River in eastern Sri Lanka. The World Bank is providing financing totalling $42.1 million for the project, which is a part of the Mahaweli Ganga Development Program. This is the fourth irrigated agricultural development project in the program to receive assistance from The World Bank. The earlier lending totalled $140 million. The total cost of the new project is $160 million. Cofinancing amounting to about $90 million will come from the Saudi Fund and the Canadian International Development Agency. The government will provide the balance. The project will bring irrigation to about 14,000 hectares (ha) and improve the water supply for some 1,800 ha of irrigated land. About 900 farm families are currently living in the project area, and some 14,000 families are expected to settle there in the near future. At full development in five years, some 18,200 families (approximately 100,000 people) will have moved into the area. Production of rice, vegetables, citrus, cashew, and coconuts is expected to rise as a result of the project. To make up for the reduced natural vegetation because of the construction, new forests will be planted. Fuelwood and cashew plantations also will be established. Waterbodies will be stocked with fish annually to help develop fisheries. Works under the project include construction of dams and feeder canals, irrigation distribution and drainage systems, and roads. Schools, community development centers, and health facilities will be built. Agricultural extension services will be established, and settlers will receive tools, seeds, and grants to build their homes. The World Bank lending for the new project consists of a loan of $12.1 million from the International Bank for Reconstruction and Development (IBRD), and a credit of SDR 28.3 million ($30 million) from the International Development Association (IDA). The IBRD loan is for 20 years including five years' grace, with a variable interest rate, currently 10.08 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but has annual charges (0.5 percent on the undisbursed balances and 0.75 percent on the disbursed balances). NOTE: Money figures are expressed in U.S. dollar equivalents.