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Rs. 60 billion from Japan for three main Development Projects

Having identified the need for developing economic infrastructure facilities which will directly support the economic development of Sri Lanka, the Government has decided to implement Bandaranaike International Airport Development Project – Phase 2, Habarana - Veyangoda Transmission Line Project and the Project for Improvements of Basic Social Services Targeting the Emerging Region based on the strategic guidance and targets stipulated in the economic policy frame work of the government; (Mahinda Chinthana Vision for the Future). As per the Government request to provide necessary financing to implement these projects, Government of Japan has agreed to provide a sum of Japanese Yen 42 billion (approximately Rs 60 billion) to Sri Lanka under its Official Development Assistance (ODA) loan scheme.

This ODA loan scheme is extended on an annual basis with very concessionary interest rate such as 0.2% -0.3% per annum and40 years of repayment period. The  42nd Yen Loan Package is currently being processed and it is administrated by the Japan International Cooperation Agency (JICA).

 

Rs 41 billion investment for Bandaranaike International Airport Development Project – Phase2

With the objective of transforming Sri Lanka to a main commercial and business hub which connects the Eastern and the Western countries,it is expected to utilize Rs. 41 billion of the loan amount to improve and modernize the facilities of Bandaranaike International Airport (BIA).

This loan financing will be utilized to construct two story passenger terminal building with two terminals for arrivals and departures, Prier No.2 with 8 gates and 14 aerobridges, aircraft parking apron and taxiway as well as to improve the utilities such as water supply, electricity and waste water disposal system.

Due to annual increase of international passengers and international aircraft movement during the last decade, the number of passengers  visited Sri Lanka in 2011 have exceed 6 million and it is estimated that more than 8 million international passengers will arrive the country by 2015. Accordingly, this project will immensely be contributedtowards further development of the tourism industry which has shown a remarkable progress in parallel to country’s rapid economic growth with current peaceful environment.

In addition, the number of overflying has been increased significantly during recent past with continuous growth in air service sector in South Asian Region.  This situation has created more opportunities for Sri Lanka to earn a large amount of foreign exchange by providing necessary monitoring services to the overflying aircrafts. Therefore, this project will generate sufficient economic benefits within the country to recoup the investment cost earlier than the 40 year repayment period.

 

Rs. 13 billion investment for Habarana - Veyangoda Transmission Line Project

The objective of this project is to improve the stability and reliability of the transmission system while minimizing the transmission losses by constructing a 220kV transmission line between Habarana and Veyangoda with enhancing capacity and thereby meet the annually growing demand for electricity and minimize the CO2 emissions during power generation.Further, this project will help to meet the country power requirement by of the country transmitting the power from in the proposed coal power plant at sampur, Trincomalee to the national grid.

This project will also ensure continuous power supply without interruption and contribute directly and indirectly to economic development of the country by creating opportunities for business community and producers to maintain their economic activities in more organized and productive manner. Accordingly, the cost of investment, Rs 13 billion would be recorded before the loan repayment period of 40 years.

 

Rs. 5 billion investment for the Project for the Improvements of Basic Social Services Targeting the Emerging Regions

The government has planned to invest approximately Rs. 5 billion of the loan amount for expansion of the production capacity of the State Pharmaceutical Manufacturing Corporation (SPMC) and improvement of existing facilities in secondary hospitals. Accordingly, four new tableting machines with higher capacity will be installed at SPMC along with other supporting processing machinery to enable the production of 4000 mn tablets to meet the annual pharmaceutical requirement of the country.

Also, four selected Secondary hospitals in Central, Sabaragamuwa, North Western and North Central provinces will be upgraded to the required level to function as core hospitals in the region with the objective of improving health conditions of the local community in rural areas while minimizing the current issues in relation to providing health facilities for patients coming to tertiary care medical institutions.

In addition, 124 ambulances will be provided to hospitals in Central, Sabaragamuwa, North Western, North Central, Uva, Eastern and Northern provinces, ensuring speedy transfer of patients who are in critical condition from peripheral, central and district hospitals to base and teaching hospitals for immediate curative treatments. This project creates opportunity for people to participate in their economic activities actively and effectively while ensuring a healthy society. Accordingly, this loan which is obtained under concessionary annual interest rate of 0.2% will be repaid before loan repayment period of 40 years through the economical benefits that will generate by the project.

The signing of Exchange of Notes pertaining to the above Loan took place, at the Ministry of Finance and Planning. His Excellency Nobuhito Hobo, Ambassador of Japan in Sri Lanka signed the Exchange of Notes on behalf of the Government of Japan while P B Jayasundera, Secretary, Ministry of Finance and Planning signed on behalf of the Government of Sri Lanka. Three Loan Agreements were also signed between Government of Sri Lanka and Japan International Cooperation Agency (JICA) for the above three projects. P B Jayasundera, Secretary, Ministry of Finance and Planning on behalf of the Government of Sri Lanka, Prassna Wickramasuriya, Chairman, Airport and Aviation Services (Sri Lanka) Ltdfor Bandaranaike International Airport Development Project and Akira Shimura, Chief Representative of JICA Sri Lanka Office on behalf JICA singed the Loan Agreements.

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