One of the basic tenets of ODA loans to provide concessionary long-term, low-interest funds needed for the self-help efforts of developing countries, including social infrastructure development and economic stabilization. ODA loans are a key form of financial assistance that are indispensable in putting in place the socioeconomic infrastructure necessary for the economic development of developing countries.
Financial Assistance to Sri Lanka dates back to 1976, with 110 projects supported by ODA loans to the tune of 730 billion Japanese Yen. Under ODA loans to Sri Lanka support 3 priority areas such as Power, Roads and Water. As an organisation providing policy based financing, it has also actively dealt with conflict sensitivity and other various global challenges such as poverty, the HIV/AIDS epidemic and the environment.
With the growth in Sri Lanka’s population, the demand for water has increased rapidly. Over the years, JICA has invested in Sri Lanka’s water sector, supporting 8 water supply and 5 flood control projects. JICA continues to provide financial assistance to the ‘Water Sector Development Project’, which is aimed at expanding water supply facilities in Colombo and Kandy and developing the sewerage system in Kandy.
These development activities provide better water and sanitation for people, helps alleviate rural poverty, generates direct and indirect employment and upgrades socioeconomic conditions through access to improved healthcare, sanitation and other basic amenities.
JICA is committed to development of Sri Lanka’s road network, and is arguably the biggest donor in the roads sector. Road projects are distributed throughout the island and vary in size, though JICA’s comparative strength is in large national level roads and expressways. JICA has also assisted conflict and tsunami affected roads in the Eastern province through the Eastern Road Improvement Project, while two projects, the Road Network Improvement Project and the Provincial Roads Improvement Project in central Sri Lanka - one of the poorest regions of the country has helped the area grow and develop.
By being present in road projects throughout the country, JICA has played and will continue to play a major role in enhancing growth, in peace building and in reducing regional inequality and poverty.
Sri Lanka’s energy sector has been receiving direct assistance under JICA’s ODA Yen Loan program since 1986. For over 20 years, 18 projects have been successfully implemented in the areas of power generation, transmission and distribution.
Assistance is also being focused on developing alternative energy sources to meet the country’s growing needs for low cost electricity. Development activities undertaken so far have ensured that appropriate steps are taken to adequately compensate affected communities and measures implemented to minimise the environmental impact. The Upper Kotmale Hydro Power project for example provides better or equal housing facilities for nearly 500 affected families, while 500,000 households are expected to benefit from the project.
JICA considers that Conflict Sensitive Approach is one of the key aspects for the operation of development financing in Sri Lanka. Being conflict sensitive, we try to ensure the regional and ethnic balance, assess the potential impact of the projects to conflict, combine long term commitment and quick results, consider safety assurance, and so on. The approach should be applied at all stages of project cycle; formulation, implementation and evaluation.