World Bank approves $40 mn financing to improve water & sanitation services in Sri Lanka

The World Bank’s Board of Executive Directors approved $40 million in additional financing for Sri Lanka to expand water supply, sanitation, and hygiene services in 7 districts through the Water Supply and Sanitation Improvement Project (WASSIP). The project will also increase septage facilities in the more populated part of the country in Western, Southern and North Western Provinces.

WASSIP is the third water sector project financed by the World Bank since 1998 to provide safe drinking water and sanitation in rural, estate and urban areas of Sri Lanka. With the additional financing, the project will support the Government of Sri Lanka’s “Water for all” pledge to cover 4.7 million people in the next four years.

The project finances new water supply systems, rehabilitation of existing water supply systems, toilets for households and schools, and septage treatment plants. To ensure sustainability, local community-based organizations are trained to operate and maintain the systems. Each household agrees to pay a tariff that ensures that operation, maintenance, and replacement costs can be covered.

“Building safe water supply and sanitation systems to ensure a healthy nation is crucial as Sri Lanka battles the COVID-19 pandemic,” said Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka. “Building on the good results of the parent project, the additional finance will extend coverage to areas of the country that are most vulnerable to climate related risks and have the highest level of poverty.”

The project has already reached about 310,000 people in Badulla, Nuwara Eliya, Kegalle, Mullaitivu, Kilinochchi, Ratnapura and Moneragala. New beneficiaries are being added daily as construction of ongoing schemes is completed and households receive water connections. The project has completed almost 80 water supply systems, more than 18,000 toilets and 30 schools have been provided with improved sanitation facilities, including menstrual hygiene facilities where needed.

The project is implemented by the Ministry of Water Supply and the project management unit includes staff from the National Water Supply and Drainage Board (NWSDB). A project steering committee has been set up at the national level to provide guidance. The Department of National Community Supply actively supports the implementation of service delivery in rural areas and the Plantation Human Development Trust (PHDT) supports service delivery in estates.

“This is the only project that provides treated piped water to rural and estate sectors of Sri Lanka,” said Pratibha Mistry, World Bank Task Team Leader of the project. “The project has demonstrated that communities can manage and operate their own systems. With this experience this additional financing intends to expand this model of service delivery in urban areas for improved sanitation.”

The $40 million loan is provided by the International Bank for Reconstruction and Development (IBRD). The variable spread loan has a final maturity of 18 years, including a grace period of 5 years. This additional finance builds on the IDA credit of $165 million that financed the parent project which directly benefited over 15,000 rural households.