European Investment Bank confirms Euro 50 m backing for Colombo water network

Finance Minister Ravi Karunanayake and Vice President of the European Investment Bank (EIB) Andrew McDowell sign a ¤ 50 million Financing Agreement for the Greater Colombo Wastewater Management Project at the European Investment Bank Office in Brussels, Belgium

The European Investment Bank will provide € 50 million to support improvement and expansion of sewage networks across Colombo. 

The new loan will help the Colombo Municipal Council achieve its goal of providing full sanitation coverage to benefit people living and working in the greater Colombo area. The new EIB loan is the European Investment Bank’s first support for water investment in Sri Lanka and the first loan for public sector investment agreed with the new post-civil war government.

“New support from the European Investment Bank will help unlock essential new investment to improve sanitation in Colombo. I look forward to strengthening cooperation between the EIB and Sri Lanka in the years to come,” said Finance Minister Ravi Karunanayake, following his meeting in Brussels with senior European Investment Bank officials responsible for lending in South Asia.

“Increased access to sanitation to be achieved by this project will improve the lives of thousands of people living in Colombo and contribute to the achievement of sustainable development goals in Sri Lanka. The European Investment Bank is pleased to be working closely with partners in Sri Lanka to ensure an environmentally sustainable future for the country’s capital and is grateful for the excellent cooperation with the Asian Development Bank in our first joint support in the country. The fruitful discussions with ministers Karunanayake and Samarawickrama have outlined how the EIB’s global experience can support new investment to improve lives and enhance opportunities in Sri Lanka,” said European Investment Bank Vice President Andrew McDowell.

“This loan is a further example of the European Union’s support for Sri Lanka’s long-term development. Studies show that modern sanitation is one of the most important factors in people’s health and wellbeing. In addition, water supplies in many developing countries are under growing pressure from urbanisation and climate change, which puts a premium on the efficient use of those resources. We are pleased to provide assistance to help address these challenges and improve access to water and sanitation for the people of Colombo,” asserted European Union Ambassador to Sri Lanka and the Maldives, Tung-Laï Margue.

The 25-year long-term loan was formally agreed upon at a signing ceremony in Brussels attended by Karunanayake, Minister of Development Strategies and International Trade Malik Samarawickrama and McDowell, who is responsible for lending operations in South Asia. The new loan represented the EIB’s fifth sovereign loan in the country.

The existing water supply and sewage network in Colombo was built 100 years ago and is not adequate for the city’s needs. Once complete, the upgraded water network will enable clean water to be supplied 24 hours a day and seven days a week, compared to the currently heavily restricted service.

The new water investment program will include the provision of a new sewage network in currently unserved areas of Kirulapone. Under the initiative, a new wastewater treatment facility will also be built to reduce pollution at the Wellawatte sea outfall.

“It is encouraging to see others joining in this effort to improve Colombo city dwellers’ quality of life which will cater to the increasing demand in the city for improved water and wastewater services,” said Asian Development Bank, Sri Lanka Resident Mission, Country Director Sri Widowati.

The new European Investment Bank loan to Sri Lanka will be used to finance investment work being undertaken by the Colombo Municipal Council. The Asian Development Bank will also support the water investment project and this new initiative marks the first time that the European Investment Bank has financed a project alongside another international financial institution in Sri Lanka.

The European Investment Bank has supported investment in Sri Lanka since 2002, including backing climate-related investment, private companies and post-tsunami recovery.

The European Investment Bank is the world’s largest international public bank and is one of the largest lenders for water investment worldwide. Over the last decade the European Investment Bank has provided more than € 37 billion for water-related investment in 67 countries around the world.