Govt. receives additional $ 18 million loan from OPEC fund for Kalu Ganga Development Project

The Government has received an additional $ 18 million loan from the OPEC Fund for International Development (OFID) to finance the remaining work of the Kalu Ganga Development Project.

The loan agreement was signed on Friday, 13 October at the office of OFID in Washington DC by Secretary to the Ministry of Finance and Mass Media Dr. R.H.S. Samaratunga on behalf of Sri Lanka, and the Director General of OFID Suleiman J. Al-Herbish on behalf of OFID. Minister of Finance and Mass Media, Mangala Samaraweera, was also present at the occasion.

The Kalu Ganga Development Project is currently being implemented by the Ministry of Mahaweli Development and Environment with the financial assistance of the Saudi Fund for Development (SFD), Kuwait Fund for Arab Economic Development (KFAED) and OPEC Fund for International Development (OFID).

The Kalu Ganga Reservoir has a capacity of 265 m3 million (MCM) of water and will divert 100 MCM annually to the Moragahakanda Reservoir. Under this project, new irrigable lands of nearly 3,000 hectares in the Kalu Ganga Basin are expected to be developed.

Unforeseen geological conditions in the foundations and necessary design revisions have led to a price increase and it is noted that the funds available from the above donors are insufficient to complete the remaining work of the project.

OFID has agreed to provide an additional loan of $ 18 million to finance a part of the shortfall. The Sri Lankan Government has already entered into an agreement with KFAED to finance a part of the remaining shortfall. The balance portion of the shortfall is to be obtained through the SFD.