World Bank Assists Rehabilitation in Northern Sri Lanka

by World Bank, December 18, 2009

Press Release No:2009/207/SAR

Media Contacts:

In Colombo: Chulie De Silva
(94-11) 5561-323
cdesilva@worldbank.org

In Washington: Erik Nora
(202) 458-4735
enora@worldbank.org 

Washington, December 17, 2009 - The World Bank today approved a US$77 million package for Sri Lanka, designed to support the return of 100,000 Internally Displaced Persons (IDPs) to their places of origin in the Northern Province and to restore their livelihoods destroyed by three decades of civil war. The Bank will also support rehabilitation of provincial roads in Eastern, Northern and southern Uva provinces through a US$105 million credit for a Provincial Roads Project.

Sri Lanka’s internal conflict has ravaged the country since the early 1980s and has stunted the country’s development, particularly in the Northern and Eastern Provinces. Most aspects of life suffered: people were displaced, institutions were weakened, and infrastructure was damaged. With the end of armed confrontations in May 2009, Sri Lanka is now facing a historic opportunity for development and reconciliation.

“The challenges of reconciliation and reconstruction are daunting,” said Naoko Ishii, World Bank Country Director for Sri Lanka.  “The approval of this response package by the World Bank’s Board of Directors demonstrates that development partners recognize the challenges that the country is facing and want to help. We trust the interventions initiated by the World Bank-supported projects in the North will build a good foundation for rehabilitation and reconstruction and provide a strong platform for the Government to welcome other development agencies as they too come forward to assist Sri Lanka at this critical juncture.”  

The US$65 million Emergency Northern Recovery Project (ENREP) will help the Government of Sri Lanka to assist about 100,000 of the returnees as they seek to resume their economic and social lives.  It will restore village-level infrastructure and war-damaged rural access roads, drinking water, irrigation facilities, and public office buildings.  ENREP includes “cash for work” opportunities for returnees to fill the income gap between the time of return and the resumption of livelihoods.  In addition, the project will provide assistance for returnees who wish to resume farming and fishing.

In tandem with ENREP, the Bank will provide an additional US$12 million to the ongoing community-based Reawakening Project to provide livelihood support to the most vulnerable returning IDPs, including women-headed households, youth and ex-combatants, as well as disabled and landless people.  Already active since 2004, this project has benefitted close to 40,000 households - or 200,000 individuals - through increased incomes and improved access to village-level social and economic infrastructure.  This additional financing covering the Northern Province will help restore farm and non-farm sustainable livelihoods, and support irrigation rehabilitation for the newly returned IDPs.  As part of the integrated implementation of ENREP and the Reawakening Project, consultation mechanisms already established under the Reawakening project will be used to tailor support to the needs of the returning IDPs.

The Provincial Roads Project includes a $20 million allocation to the Northern Province, with the rest of the project financing road improvement and maintenance in the still-recovering Eastern Province and Uva Province in the south, which is one of the poorest in the country.   The work in the Northern Province will improve about 100km of provincial roads and other road infrastructure in selected, prioritized areas of Jaffna District.  This assistance will go towards restoring connectivity between the severely damaged rural network and the main highways, as well as access to socio-economic services.  The project will also support rehabilitation of 150km of roads in Uva Province and 100km in Ampara District of the Eastern Province.  The people in these provinces rely on agriculture as a main source of income and inadequate connectivity to markets prevents them from getting the best prices for their products.

The credits from the International Development Association (IDA), the World Bank’s concessionary lending arm, have 20 years to maturity with a 10-year grace period.