Japan to provide $240m loan

[TamilNet, Friday, 05 November 2004, 01:30 GMT]
Govenrment of Japan has agreed to provide a loan of nearly $240m on concessionary terms to Sri Lanka for small scale infrastructure upgrades, small industries promotion and to implement environmentally friendly projects, a news release from the the Embassey of Japan issued Thursday said. The interest rate of the 40year loan is a low 0.75%.

Full text of the news release follows:

1. The 36th Official Development Assistance (ODA) Loan The Government of Japan has agreed to provide its 36th Official Development Assistance (ODA) Loan to the Government of Sri Lanka, amounting to 26,631 million Yen (approximately Rs 24,767 million) towards projects aimed at facilitating the country's economic development initiatives. Loans under this scheme are offered on concessionary terms and administered by the Japan Bank for International Cooperation (JBIC).

This was conveyed by H. E. Mr. Akio Suda, Ambassador of Japan to Hon. Dr. Sarath Amunugama, Minister of Finance and Planning at 11.00 am Thursday, November 4th at the Ministry of Finance and Planning.

The three projects financed by this scheme are as follows:

• Small-scale Infrastructure Rehabilitation and Upgrading Project II Yen 11,776 mil.
• Small and Micro Industries Leader and Entrepreneur Promotion Project III Yen 9,619 mil.
• Environmentally Friendly Solution Project II (E-Friends II) Yen 5,236 mil.

The three projects cover the whole country including the North and East Provinces.

The loan terms offered are highly concessionary in this instance, which is in accordance to a new preferential scheme for peace building adopted by the Government of Japan.

2. The statement of H.E. Mr. Akio Suda, Ambassador of Japan Japan's Country Assistance Program for Sri Lanka broadly focuses on initiatives for consolidation of peace and rehabilitation, as well as on long-term development and economic growth. The assistance provided by Japan's ODA is also in line with the country's economic policy framework and long-term development needs. To this effect Japan's ODA assistance has so far targeted a wide range of activities such as, improvement of economic infrastructure, economic sector reforms, poverty alleviation, regional development, human resources development, avenues for foreign currency earnings, post conflict rehabilitation, improvements of lives, etc.

For effective utilisation of Japan's assistance programmes, it is strongly expected that the Government of Sri Lanka adheres to consistency of its development policies, particularly in relation to key socio-economic development projects. The Government of Japan supports socio-economic development of the country, which are backed by a firm commitment on the part of both the Government and the people of Sri Lanka and based on consistent development policy.

In the present situation, where the Cease-fire Agreement continues to be in place whereas the peace talks are yet to be resumed, the consolidation of peace is one of the most important aspects in achieving sustainable socio-economic development. In this context, the Government of Japan urges all parties concerned, including the Liberation Tigers of Tamil Eelam (LTTE), to respect and strictly adhere to the Cease-fire Agreement. Inhuman killing incidents should be stopped. At the same time the Government of Japan strongly hopes that the prolonged disagreement on the resumption of the peace talks will be resolved quickly by constructive efforts of the parties concerned and that substantial progress will be made in the peace process through the talks.

1. Small-scale Infrastructure Rehabilitation and Upgrading Project II (SIRUP II)
   
   Yen 11,776 million to the Ministry of Finance for the implementation of the Small-scale Infrastructure Rehabilitation and Upgrading Project II (SIRUP II), which follows part I that was committed in 2003. The objective of the project is to contribute to the improvement of basic conditions for living and socio-economic activities in rural and urban areas throughout Sri Lanka through rehabilitation and upgrading of small-scale pro-poor infrastructure in the areas of education, health, and rural development. The repayment period for the Loan will be 40 years including 10 years grace period with interest rate of 0.75% per annum.
   
   
2. Small and Micro Industries Leader and Entrepreneur Promotion Project III (SMILE III)
   
   Yen 9,619 million to the Ministry of Small and Medium Enterprise Development for the implementation of the Small and Micro Industries Leader and Entrepreneur Promotion Project III (SMILE III), which follows part I and II that was committed in 1997 and 2001 respectively. The objective of the project is to promote stable and balanced economic growth in Sri Lanka through, (1) providing capital to small and micro-scale enterprises (SMEs) throughout Sri Lanka through intermediary financial institutions, (2) developing managerial, accounting and technical skills of SMEs and (3) strengthening institutional capabilities of intermediary financial institutions. The repayment period for the Loan will be 40 years including 10 years grace period with interest rate of 0.75% per annum.
   
   
3. Environmentally Friendly Solution Project II (E-Friends II)
   
   Yen 5,236 million to the Ministry of Small and Medium Enterprise Development for the implementation of the Environmentally Friendly Solution Project II (E-Friends II), which follows part I that was committed in 1998. The objective of the project is (1) to assist enterprises throughout Sri Lanka in finding solutions to the environmental problems, such as industrial pollutions caused by their manufacturing and energy consumption, by providing capital in loans through intermediary financial institutions to sub-projects whose purpose is to improve the environment and meet the environmental safety standards; (2) to provide financial assistance and establish a revolving fund to continue financial assistance to environmental sub-projects on sustainable basis and (3) to assist enterprises in implementing environmentally friendly sub-projects through loans. The repayment period for the Loan will be 40 years including 10 years grace period with interest rate of 0.75% per annum.

    

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