July 18, 2008 (LBO) – The World Bank is giving 98 million US dollars in additional financing for road re-building in Sri Lanka amid soaring costs of oil based materials, the multilateral lender said. “The project has made good overall progress,” says World Bank infrastructure specialist Amali Rajapaksa.
“Importantly, it has played a pivotal role in securing a mechanism for financing the maintenance of national roads which have suffered from a backlog of maintenance for several years.”
The project is expected to close in 2011. The money comes to supplement a 100 million dollar road sector assistance project originally approved in 2005 to run with funds from International Development Association (IDA), the World Bank’s concessional window.
The IDA credit has a 20-year maturity with a 10-year grace period.
“The additional finance will be mostly used to cover cost-overruns mainly due to the unprecedented oil price increase in the world market that has led to the escalation of prices in oil-based materials,” the World Bank said in a statement.
Sri Lanka’s national road network carries over 70 percent of the traffic and is vital for the movement of people and goods.