JBIC Signs ODA Loan Agreements with Sri Lanka: Supporting Medium and Long-Term Reconstruction from Damage Caused by Civil Conflict and Tsunami
1. Japan Bank for International Cooperation (JBIC; Governor: Kyosuke Shinozawa) signed today ODA loan agreements totaling up to 21.559 billion yen for three projects with the Government of the Democratic Socialist Republic of Sri Lanka.
2. In Sri Lanka, it remains an urgent issue to make progress in reconstruction from damage caused by the 20-year-long conflict and the tsunami, triggered by the earthquake off the coast of Sumatra in December 2004. Based on a joint tsunami damage and needs assessment conducted in January 2005 by JBIC, the World Bank, and the Asian Development Bank (ADB), many donors have supported the rehabilitation and reconstruction efforts. JBIC also offered ODA loans for emergency assistance in June 2005. In addition to assistance for rehabilitation and reconstruction of infrastructure damaged by conflict and the tsunami, JBIC has also provided knowledge assistance, conducting a survey with assistance from a Japanese NGO that is familiar with local circumstances in helping the self-support efforts of women who are particularly vulnerable among the people affected by the civil conflict and the tsunami.
3. Under these circumstances, this year's ODA loan package provides assistance for economic reconstruction in Sri Lanka from a medium and long-term perspective, rather than assistance for meeting emergency needs of rehabilitating damaged infrastructure. In addition, recognizing that Sri Lanka is a multiethnic country, JBIC will give assistance in consideration of ethnic and regional balance, supporting the Eastern Province devastated by the conflict and the southern region where there are a large number of people living in poverty.
4. The highlights of this year's ODA loan package are as follows: (1) Supporting reconstruction through infrastructure development in the Eastern Province affected by the long-term conflict and the tsunami In the eastern region of Sri Lanka, where development had been lagging behind due to the 20 year-long conflict, the tsunami in the Indian Ocean that broke out in December 2004 caused devastating damage to its limited infrastructure. The emergency ODA loan JBIC extended in June 2005 supported rehabilitation of small-scale economic infrastructure and private small enterprises by providing funds through local financial institutions. Pro-Poor Eastern Infrastructure Development Project aims to support medium and long-term reconstruction and development by developing large-scale infrastructure, including roads and a bridge. This project is also the first ODA loan-supported project to target the Eastern Province, which encompasses the area controlled by Liberation Tigers of Tamil Elam (LTTE), an organization of ethnic Tamils.
(2) Supporting economic development in the southern region inhabited by a large number of people in poverty Sri Lanka's southern region, where cement and plantation industries reside, has a strong latent demand for freight transport. There is thus a need to develop a regional port for efficient cargo shipment. The southern region is also home to many people living in poverty and one of the hardest-hit regions by the tsunami in the Indian Ocean like the eastern region. Therefore, the Galle Port Development Project (I) aims to support economic development in the southern region by developing a regional port as a hub of economic development that will enable large 30,000t class ships to enter the port and accommodating the growing freight demand and that will also serve.
(3) Supporting private-sector-driven economic growth through tourism sector development Since the ceasefire agreement was concluded in 2002, tourist visits to Sri Lanka have been on the rise, and the tourism sector has played a significant role in boosting the national economy, earning foreign currencies and generating employment. Although the tsunami has brought a decline in the number of foreign visitors to this day, there remain strong development needs in the tourism sector. Tourism Resources Improvement Project (TRIP) aims to support private sector driven economic growth by developing tourism-related infrastructure and human resources in the tourism industry, primarily in central Sri Lankan cities where world heritage sites are located.
 JBIC provided two ODA loans totaling \11,284 million respectively for the Sri Lanka; Tsunami Affected Area Recovery and Takeoff (STAART) Project and the Vavuniya- Kilinochchi Transmission Line Project in June 2005.