July 31, Colombo: The Austrian government has promised to provide a US$ 100 million soft loan to Sri Lanka to rebuild its economy and complete development projects.

During a meeting with the Economic Development Minister of Sri Lanka Basil Rajapaksa to discuss the trade and economic relation between the two countries, the Austrian Ambassador to Colombo Dr. Ferdinand Maultaschi has pledged to help Sri Lanka to rebuild its economy and provide necessary assistance for further development works.

The Austrian envoy has recalled that diplomatic relations between the two countries had spanned 60 years and the two countries had a strong relationship during that period. A recent visit by deputy Foreign Minister of Austria further strengthened the relation he has said.

The US$ 100 million financial assistance package will be in the form of grant and a soft loan. The US$ 65 million loan portion will carry a 2% interest and have to be repaid over a period of 30 years.

Under first phase of the aid programme drinking water projects, hospital modernization projects, railway and highway bridge construction projects will be carried out, the Economic Development Ministry said on its website.

The envoy has assured Austria's help for Sri Lanka to initiate wind power generation projects starting with small scale wind power plants which could be used for agriculture and rural development.

More discussions will be held prior to the start of the second phase of the program, which will consider the rehabilitation and upgrading and strengthening of advanced technological projects, integrated landslide mitigation project for soil stabilization and slope securing, rehabilitation and upgrading of sewerage infrastructure and sanitation projects, he Ministry said.