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Sri Lanka to get US$200mn from ADB for rural roads

ECONOMYNEXT – Sri Lanka is to get two more low-cost long term loans amounting to 200 million US dollars from the Asian Development Bank (ADB) for the third phase of a rural road modernisation program.

It aims to improve road connectivity within selected rural centres by rehabilitating national, provincial, local authority and feeder roads, government spokesman Health Minister Rajitha Senaratne.

The total program covers 3,108 km of rural roads and 248 km of national roads at an estimated cost of 906 million dollars of which 800 million dollars is borne by the ADB and the rest by the government of Sri Lanka, he told a news conference.

The ADB will lend 175 million dollars from its Ordinary Capital Resources at an annual interest rate of 0.6 percent on top of the London Inter-bank Offered Rate (LIBOR), less a credit of 0.1 percent and a commitment charge of 0.15 percent a year on the undisbursed balance.

The interest on the loan, repayable over 26 years, with a five-year grace period, includes a maturity premium of 0.1 percent a year, according to the Ministry off National Policies and Economic Affairs.
The ADB will also lend 25 million dollars from the Asian Development Fund in Special Drawing Rights, repayable over 25 years with a five-year grace, at two percent annual interest throughout the tenor and equal amortisation.

The project covers the Southern and Sabaragamu provinces, Kalutara District, and the Central, North Central and North Western Provinces. (Colombo/October 22 2015)

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