France extends Euro 10m soft loan to Sri Lanka

[TamilNet, Tuesday, 13 December 2005, 17:00 GMT]
France and Sri Lanka signed a financial protocol Tuesday extending 10 million euros soft loan to the Government of Sri Lanka for assist in building Greater Trincomalee Integrated Water Supply Scheme, a joint press release issued by the Embassy of France in Colombo said.

Full text of the release follows:

Ambassade de france a sri lanka
Ministry of finance et aux maldives and planning
Service de Presse & d'Information
Colombo, 13/12/2005

Signing of Franco-Sri Lankan Inter Governmental Financial Protocol

France and Sri Lanka signed a Financial Protocol on December 14th relating to the extension of 10 million euros soft loan (1.2 billions Rupees) to Sri Lanka for the Greater Trincomalee Integrated Water Supply Scheme. The agreement was signed on behalf of the Government of Sri Lanka by Dr. P.B. Jayasundera, Secretary to the Ministry of Finance and Planning and on behalf of the Government of France by HE the Ambassador of France, Jean Bernard de Vaivre.

The signing follows the conducting of a comprehensive project evaluation and appraisal and a detailed feasibility study, financed on a grant basis by France. It was possible to put this major project into place rapidly before the passage of a year following the Tsunami due to the hard work and co-operation extended by the authorities and concerned parties on both sides. The contract for consultancy and supervision has already been awarded by the National Water Supply & Drainage Board to the French consultant SCP-Gersar and work will commence in January 2006.

This financing complements the concessionary loan of 64 million euros already extended by the French Development Agency (AFD) for the Trincomalee Integrated Infrastructure Programme. It was upon the request of the Sri Lankan authorities that France has concentrated its aid on the district of Trincomalee and that the French Ministry of Economy, Finance and Industry has agreed to fund the Greater Trincomalee Integrated Water Supply Scheme.

The existing infrastructure for the supply of drinking water to Trincomalee was carried out by a consortium of French companies including Degrémont and SCP-Gersar in the beginning of the 1980s. It was financed by France within the framework of development co-operation between the two countries, particularly active in the area of water treatment. The latest project in this domain was the plant in Anuradhapura inaugurated by the President of Sri Lanka on the 17th of July 2005.

The output of the treatment plant in Trincomalee is currently insufficient, partially due to the new needs created by the post-tsunami re settlement programs. Accordingly the objective of this 10 million euros project is to increase the capacity of the treatment plant from 25.000 cubic meters per day to 55.000 cubic meters per day. This will permit to connect the re-housing zones to the distribution network and to serve a population of more than 300,000 people at a time, against less than 140,000 at present. The project consists of the rehabilitation and extension of the existing plant in Kantale, the construction of a new raw water pumping station on the Mahaweli river and the laying of approximately 40 km of DI pipes. This project is complemented by the French Development Agency which has already committed for the funding of the extension of the existing drinking water distribution network, the supply of above mentioned pipes as well as isolated water schemes, for a total amount of 10.35 million euros.

This new loan of 10 millions euros conforms to the conditions announced by France in the beginning of 2005. Repayment of the loan will be over 20 years, with a grace period of 10 years, and it will bear an interest rate of 1% per annum.


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