March 23, 2007 (AFP) – Japan gave Sri Lanka a 320-million-dollar loan Friday to build roads and improve drinking water supply in key cities, the Japanese embassy here said. More than 4,000 people have died since December 2005 in fighting between Tamil rebels and government forces despite a Norwegian-brokered truce that has been in place since February 2002. About 217 million dollars would be spent on road construction, and the remainder used to expand water and sanitation facilities in the capital Colombo and Kandy, Sri Lanka’s second-largest city, the embassy said in a statement.
The loan agreement was signed here between Sri Lanka’s treasury chief Punchi Banda Jayasundera and Nobuaki Ito, the acting head of the Japanese embassy.
Japan is the biggest bilateral aid giver to Sri Lanka, which is battling a 35-year-old Tamil separatist conflict that has claimed more than 60,000 lives since 1972.
Finance ministry figures here show that Japan had given 198.8 million dollars to Sri Lanka between January and September last year.
“Japan also recognises the importance for Sri Lanka to make efforts to resolve the ethnic problem through peaceful dialogue,” the embas