ADB approves $100mn Sri Lanka budget support loan

The Asian Development Bank (ADB) has approved a 100 million dollar policy-based loan, with an 800,000 dollar technical assistance grant, linked to water supply and sanitation sector reforms in Sri Lanka.

The reforms seek to enhance the country’s resilience to climate change impacts and promote long-term sustainability, the global lender said.

“Efficient delivery of safe and reliable water supply in Sri Lanka is limited by fragmented water resources management and exacerbated by climate change. This significantly affects the daily life of Sri Lankans—many of whom do not have access to piped water supply,” Senior Urban Development Specialist Pedro Almeida said.

“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.”

The Water Supply and Sanitation Reform Program, composed of two subprograms of $100 million each, will contribute to a more resilient and sustainable delivery of water supply and sanitation services, ADB said.

Subprogram 1 will establish policies and strategies nationally and for the National Water Supply and Drainage Board (NWSDB).

Subprogram 2 will support the implementation of reform actions and guidelines.

“This programme is an important achievement in our ongoing efforts to deliver on SDG6, adapt Sri Lanka’s water resources to climate change and address vulnerabilities in our water infrastructure,” Sri Lanka’s Minister of Water Supply and Estate Infrastructure Jeevan Thondaman said.

ADB pointed out that water resources management in the country faces longstanding challenges such as unbalanced allocation between agriculture and drinking water, inadequate climate change consideration in planning and development, involvement of several agencies at national and regional level, and impacts from unplanned land use and deforestation.

Subprogram 1 supports the National Water Resources Policy approved by the Prime Minister’s Office to ensure procedures are in place for equitable water allocation and sharing.

It also helps increase the efficiency and performance of the sector through the Ministry of Water Supply and Estate Infrastructure Development’s (MWS) approval of a climate-resilient project appraisal framework for investments in the drinking water sector.

It will enhance the NWSDB’s financial sustainability, efficiency, and performance through financial sustainability and public-private sector roadmaps, and a business efficiency action plan.

The program comes with a 800,000 dollar technical assistance grant that will provide capacity and advisory support to 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 provide 500,000 dollars while the Water Innovation Trust Fund, under the Water Financing Partnership Facility administered by ADB, will put in 300,000 dollars, the bank said.

Source: economynext