Annual Report 2010 - Ministry of Finance and Planning

5 | FOREIGN FINANCINGFinancing for Water Supply and SanitationThe government has accorded highpriority to improve access to safedrinking water and sanitation, asavailability of sustainable and efficientwater supply and sanitation is vitalto keep up the pace of economicdevelopment in the country.While increasing the governmentcontribution to meet the cost ofproviding safe drinking water topeople, it has encouraged the lendingagencies to provide sufficient financingto fulfill the increasing demand forwater and sanitation facilities.During the period of 2005-2010foreign aid commitment for water andsanitation sector was around USD 1,150million. Of this amount about USD 50million was received as grants.The government of Japan has beenthe major donor in the water supplysector and their commitment overthe last five years exceeded USD 396million. The Asian Development Bankand the government of Korea have alsoprovided a sizeable amount of financialassistance for the water supply sectorduring the same period.Although a larger portion of theforeign assistance for the Water Supplyand Sanitation sector was receivedas concessional credit, a significantamount of foreign assistance alsocame in the form of export credit andmixed credit facilities. This amountaccounted for about 38 percent of thetotal foreign aid received for watersupply and sanitation from 2005 to2010.The total commitment for the watersupply and sanitation sector in 2010was USD 312 million. This is an increaseof 48 percent over the commitment in2009.The foreign funding received bythe water supply and sanitationsector during the last five yearshas been utilized to improve urbanand rural water supply services inthe Jaffna, Trincomalee, Ampara,Kandy, Anuradhapura, Polonnaruwa,Hambantota, Batticaloa, Colombo,Ratnapura and Nuwara Eliya districts.The gradual increase of water sectorinvestment yielded increased numberof domestic and industrial waterconnections. The total number ofconnections provided through theschemes managed by the NWSDB in2010 was about 1,350,000 and thiswill be increased to 1,600,000 in 2015through the on-going water supplydevelopment activities.The total foreign fund disbursementfor the five year period of 2005-2010 was USD 400 million. Thetotal disbursements made by threemajor donors (Japan, Korea and theADB) were about USD 157 million,which was 39 percent of the totaldisbursements.The highest ever foreign funddisbursement in relation to thewater supply and sanitation projectsimplemented since 2005 was recordedin 2010. The amount disbursed in 2010was USD 150 million.Table 5.9 > Foreign Assistance to the Water Supplyand Sanitation sectors 2005 - 2010 (USD Mn)Table 5.10 > Commitments in 2010 (USD Mn)Donor Loan Grant TotalBilateral - - 559.44Japan 396.21 - 396.21Korea 91.74 3.90 95.64Denmark 25.25 - 25.25Netherland - 31.03 31.03Finland - 9.15 9.15Germany 1.60 - 1.60USA - 0.56 0.56Export439.83 - 439.83CreditMultilateral 154.21 - 154.21ADB 154.21 - 154.21Total 1,108.8 44.64 1153.48Source: Department of External ResourcesProjectUSDmnTypeEastern Province WaterSupply Development53 loanKandy City WastewaterManagement152.4 loanReconstruction of WaterSupply Galle District –1.6 loanPhase IIIntegrated Water supplyScheme for the UnservedAreas of Ampara District-105 loanPhase IIITotal 312DonorGov. ofJapanGov. ofJapanRepublic ofGermanyAus. &New Ze.InvestmentBank262