ADB approves $100 million loan to support Sri Lanka’s water supply reforms

The Asian Development Bank (ADB) has approved a $100 million policy-based loan to support Sri Lanka’s water supply and sanitation sector reforms to enhance the country’s resilience to climate change impacts and promote long-term sustainability.

The Water Supply and Sanitation Reform Program, composed of two subprograms of $100 million each, will contribute to a more resilient and sustainable delivery of water supply and sanitation services.

Subprogram 1 will establish policies and strategies nationally and for the National Water Supply and Drainage Board (NWSDB) while subprogram 2 will support the implementation of reform actions and guidelines.

“Efficient delivery of safe and reliable water supply in Sri Lanka is limited by fragmented water resources management and exacerbated by climate change. This significantly affects the daily life of Sri Lankans – many of whom do not have access to piped water supply,” said Senior Urban Development Specialist Pedro Almeida.

“This program will not only strengthen mechanisms to ensure adequate access to safe water but also address governance and sustainability challenges of the sector that will enable the participation of the private sector.”

Water resources management in the country faces long standing challenges such as unbalanced allocation between agriculture and drinking water, inadequate climate change consideration in planning and development, involvement of several agencies at national and regional level, and impacts from unplanned land use and deforestation.

To strengthen water resources management, climate resilience and environmental sustainability of water supply operations, subprogram 1 is supporting the National Water Resources Policy approved by the Prime Minister’s Office to ensure adequate procedures are in place for equitable water allocation and sharing. Other measures promoted include national policies to ensure access to safe drinking water, gender-sensitive and inclusive water service delivery, and a climate change roadmap.

Subprogram 1 is also helping to enhance the efficiency and performance of the sector through the Ministry of Water Supply and Estate Infrastructure Development’s (MWS) approval of a climate-resilient project appraisal framework for investments in the drinking water sector, and NWSDB’s financial sustainability, efficiency, and performance through financial sustainability and public-private sector roadmaps, and a business efficiency action plan.

The program comes with a $800,000 of technical assistance grant that will provide capacity and advisory support to MWS and NWSDB for the formulation, deployment, implementation, and monitoring of the reform initiatives in the next subprogram.

ADB’s Technical Assistance Special Fund will cover $500,000 of the amount while the Water Innovation Trust Fund, under the Water Financing Partnership Facility administered by ADB, will finance $300,000.

(Source: ADB)