Jan 17, Manila: Sri Lanka's President Mr. Maithripala Sirisena made his first visit to the Asian Development Bank (ADB) headquarters in Manila today while conducting a state visit to the Philippines and met with ADB President Takehiko Nakao.
During the visit, Mr. Sirisena and Mr. Nakao discussed development challenges faced by Sri Lanka and ADB's role in helping address them, and the ADB agreed to provide US$ 445 million assistance to Sri Lanka for three major projects.
The President and ADB Chief signed three loan agreements totaling $455 million for projects in higher education and transport as well as a technical assistance loan in the urban sector.
The three loans signed today include $300 million to finance construction of about 5.3 kilometers of an elevated toll highway to link Colombo's international port with the country's expressway network under the South Asian Sub-region Economic Cooperation (SASEC) assistance for the Port Access Elevated Highway Project (PAEHP).
The ADB also agreed to provide a $145 million for a project to support the development of science and technology faculties in four universities to nurture a new breed of technology-oriented graduates and a $10 million technical assistance loan to finance the establishment of a facility that will help improve the design and implementation of urban projects in Sri Lanka.
During the meeting President Sirisena said Sri Lanka highly values the assistance provided by ADB to various development plans of the country. "The economic cooperation extended by ADB is of extreme benefit to the countries grappling with development issues," he added.
Sri Lankan President noting that Sri Lanka's two major challenges today are elimination of poverty and curbing drug smuggling, said the country is expecting prominent assistance from ADB to face those challenges.
The ADB President said the bank could provide technical assistance to the Sri Lanka Customs Department to strengthen the detection of illegal drugs.
Mr. Nakao commended the President on Sri Lanka's achievements in reducing poverty to low single digits and improving human development. Building on its achievements so far, Sri Lanka needs to seek higher growth to achieve the goal of becoming an upper middle-income country by 2025.
He acknowledged the government's fiscal consolidation efforts, supported by an International Monetary Fund program that resulted in a primary surplus in 2017 for the first time in 63 years. "The government has taken encouraging steps to strengthen the country's public finances and it is essential to continue those measures to reduce debt," said Mr. Nakao.
Mr. Nakao appreciated the steps introduced by the government to improve the business climate, increase exports, and attract foreign direct investment. He stressed the need to continue those reforms to draw foreign investors to the country who can bring knowledge and new practices. It is also important that Sri Lanka strengthens its linkage to regional and global value chains. "ADB's technical and financial assistance to support the development of capital markets and small and medium enterprises are well aligned with the government's reform priorities," said Mr. Nakao.
President Sirisena said that Sri Lanka is suffering from both drought and floods and there is a need for a formal program to face it. The ADB agreed to assist in Climate Change Mitigation projects in Sri Lanka.
The ADB President highlighting that ADB is supporting Sri Lanka at present in the fields of energy protection, agriculture, infrastructure, climate and environment protection, forestry, said the support will continue. In addition, he also said that in the near future, ADB expects to provide assistance in the development of new projects in irrigation, highways and digital infrastructure development in Sri Lanka.
This year, ADB's total commitment to Sri Lanka, including these three loans, will amount to $815 million. ADB will continue to maintain a strong pipeline of projects totaling about $800 million a year in the current Country Partnership Strategy (CPS), 2018–2022, compared with $500 million a year in the previous CPS period.
ADB's CPS for Sri Lanka focuses on building high quality infrastructure in the transport, energy, and urban sectors by expanding investments in new areas such as railways, wind and solar power generation, and economic corridors. In the social sectors, ADB is also broadening its support for higher education and health centers. Projects in rural areas such as the Mahaweli Water Security Investment Program and Integrated Road Investment Program will support farming communities and help boost rural incomes. ADB's private sector operations will continue to provide loans, equity investments, or guarantees for public and private banks, nonbanking financial institutions, and corporations.
The Sri Lankan President expressed appreciation for the cooperation provided by ADB in building healthy ties with Sri Lanka since 1966 and the contribution made by ADB towards the other developing countries of the region.