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Asian Development Bank &

Sri Lanka FACT SHEET Partnerships

Table 1.  Sri Lanka: 2011 Loan, Technical Assistance, and Grant Approvals ($ million) Loans Sovereign 281.60

Technical Nonsovereign Assistance Grants Total – 2.24 3.00 286.84

– = nil.

Table 2.  Sri Lanka: Cumulative ADB Lending by Sector as of 31 December 2011a Sector Agriculture and   Natural Resources Education Energy Finance Health and Social Protection Industry and Trade Public Sector Management Transport and ICT Water Supply and Other   Municipal Infrastructure   and Services Multisector Total

Loans Amount (no.) ($ million) 46 11 15 21 2 11 7 23

17 8 161

Total Disbursements

991.35 351.90 677.75 494.40 35.40 243.15 233.00 1,358.20

%b 18.28 6.49 12.49 9.11 0.65 4.48 4.30 25.04

738.67 13.62 300.47 5.54 5,424.30 100.00 $3,995.0 million

ICT = information and communication technology.   Includes sovereign and nonsovereign loans.

a

b

  Total may not add up because of rounding.

Table 3. Sri Lanka: Cumulative Nonsovereign Financing by Product Number of Projects Loans Equity Investments Guarantees B Loans Total

12 Amount ($ million) 99.50 13.58 167.00 – 280.08

The Asian Development Bank (ADB) has worked closely with the Government of Sri Lanka since it joined ADB as a founding member in 1966. ADB’s country partnership strategy (CPS) 2012–2016, approved in 2011, was developed in close consultation with other development partners. ADB coordinates closely with the Japan International Cooperation Agency and the World Bank on portfolio management issues and across sectors. Under the North East Community Restoration and Development Project (NECORD), ADB has administered grants from Agence Française de Développement (AFD), Australian Agency for International Development (AusAID), and the Government of Norway for livelihood support and rural electrification. ADB’s extensive cooperation with development partners has contributed to greater coherence and harmonization of development assistance. ADB successfully implemented road rehabilitation projects with financing from the European Union and a livelihood development project funded by the Japan Fund for Poverty Reduction. Some funds from the Organization of the Petroleum Exporting Countries Fund for International Development were also administered by ADB in various sectors. The Jaffna and Kilinochchi Water Supply and Sanitation Project was also jointly financed by ADB and AFD. ADB cooperates extensively with civil society organizations in Sri Lanka to strengthen the effectiveness, quality, and sustainability of its services. For example, nongovernment organizations, together with community-based organizations and the local government, will implement the rural water supply activities in the North Central Province under the Secondary Towns and Rural Community-Based Water Supply and Sanitation Project.

Operational Challenges Sri Lanka is now categorized as a middle-income country, and as such needs to reorient its planning and policy framework to suit the requirements of a middle-income country, drawing on the experiences of other Asian countries, and international best practices. ADB will enhance its assistance by helping the government address major policy issues and institutional strengthening initiatives. As the economy becomes more integrated with the external economy, key macroeconomic and microeconomic management policy issues will need to be addressed over the country partnership strategy (CPS) 2012–2016. Capacity development of the public sector remains a key challenge, particularly in the north and east. Although Sri Lanka has a number of good contractors who compete successfully on international competitive bidding contracts, it is important to strengthen the contracting industry, especially in the north and east.

– = nil.

As of 31 December 2011


Future Directions ADB’s operations in Sri Lanka over the next 5 years will be guided by the CPS 2012–2016, which is closely aligned with the government’s strategy, Mahinda Chintana 2010–2016, and ADB’s long-term strategic framework, Strategy 2020. It focuses on three pillars: inclusive and sustainable economic growth, catalyzing private investment and enhancing the effectiveness of public investment, and human resource and knowledge development. ADB’s interventions during the CPS period will be strategically focused on transport, energy, education, public sector management, and water supply and other municipal infrastructure and services.

Context As of 31 October 2011, ADB had approved a total of 158 loans, with cumulative lending of $5.3 billion since Sri Lanka joined ADB. In addition, ADB provided $356.0 million grant assistance (including ADB administered cofinanced grants) for projects and $114.8 million through 249 technical assistance grants. Sri Lanka’s social indicators are among the best in South Asia. The country has achieved near universal literacy. Sri Lanka has a comparatively low poverty level of 8.9%, and a growth rate of around 8%. ADB assistance to Sri Lanka has gradually moved from mainly agricultural support to support for energy, roads and infrastructure, water supply and sanitation, education, postconflict reconstruction, and development of the north and east.

ADB-Supported Projects and Programs ADB has been a major development partner in the power sector of Sri Lanka, and continues to assist the government with sector reforms, focusing on strengthening power sector regulations and supporting internal reforms in the Ceylon Electricity Board. ADB is also supporting clean energy development, energy efficiency improvement, and rural electrification. Support to the transport sector aims to address connectivity issues that hindered economic opportunities, improving institutional capability at all tiers of government, and increasing road operation and maintenance funding. The Eastern and North Central Provincial Road Project and the Northern Road Connectivity Project were aimed at improving the road network in conflict-affected regions. The Southern Transport Development Project, the first tolled expressway in Sri Lanka, was unveiled in November 2011. The completed section connects Colombo to Galle in the Southern Province, significantly cutting journey times and improving road safety. Safe water and better sanitation for all is one of Sri Lanka’s social development goals. ADB financing helped 2 million people access safe water, built institutional capacity, and supported sector reforms. In 2010, ADB approved a loan for the Jaffna Peninsula to provide piped water to 300,000 people. Another 100,000 people within Jaffna will benefit from a new sewerage system. Education has been a pillar of Sri Lanka’s development policy for decades. ADB-supported education projects modernized secondary education by increasing equity of access; enhanced quality and relevance; and improved policy, governance, and service delivery.

Table 4.  Sri Lanka: Development Indicators Non-MDG Population in millions Annual population growth rate (%) Adult literacy rate (%) Population in urban areas (%) MDG Population living on less than $1.25 (PPP) a day (%) Population living below the national poverty line (%) Under-5 mortality rate per 1,000 live births Population using an improved drinking water source (%)

20.86 [2011] 1.0 [2009–2011] 90.6 [2008] 15.1 [2010] 7.0 [2007] 8.9 [2010] 17 [2010] 91 [2010]

MDG= Millennium Development Goal, PPP = purchasing power parity. Sources: ADB. 2012. Basic Statistics 2012. Manila; United Nations Educational, Scientific and Cultural Organization (UNESCO). 2012. Institute for   Statistics Data Centre; World Bank. 2012. World Development Indicators Online.

Table 5.  Sri Lanka: Economic Indicators, 2007–2011 Economic Indicator Per capita GNI, Atlas method ($) GDP growth (% change per year) CPI (% change per year) Unemployment rate (%) Fiscal balance (% of GDP) Export growth (% change per year) Import growth (% change per year) Current account balance (% of GDP) External debt (% of GNI)

2007 2008 2009 2010 2011 1,520 1,750 1,950 2,240 ... 6.8 6.0 3.5 8.0 8.3 15.8 (20.8) 3.5 6.2 6.7 6.0 5.4 5.8 5.2 4.3 (6.9) (7.0) (9.9) (8.0) (7.0) 11.0 6.2 (12.7) 21.0 22.4 10.2 24.7 (27.6) 31.8 50.4 (4.3) (9.5) (0.5) (2.2) (7.3) 46.3 42.1 ... ... ...

( ) = negative, ... = data not available, CPI = consumer price index, GDP = gross domestic product, GNI = gross national income. Sources: ADB. 2012. Asian Development Outlook 2012. Manila; ADB staff estimates; World Bank. 2012. World Development Indicators Online.

Table 6.  Sri Lanka: Project Success Rates Sector Agriculture and Natural Resources Education Energy Finance Health and Social Protection Industry and Trade Public Sector Management Transport and ICT Water Supply and Other Municipal   Infrastructure and Services Multisector Total Year of Approval 1960s 1970s 1980s 1990s 2000s

%a 40.54 71.43 75.00 55.56 100.00 66.67 50.00 71.43

No. of Rated Projects/ Programs 37 7 8 9 2 6 2 7

80.00 100.00 57.14

5 1 84

50.00 41.67 50.00 65.63 64.29

2 12 24 32 14

ICT = information and communication technology. a Based on aggregate results of project/program completion reports (PCRs), PCR validation reports (PCRVRs), and project/program performance evaluation reports (PPERs) using PCRVR or PPER ratings in all cases where PCR and PCRVR/PPER ratings are available. Sources: PCRs, PCRVRs, and PPERs containing a rating circulated as of 31 December 2011.

Table 7.  Sri Lanka: Portfolio Performance Quality Indicators for Sovereign Lending, 2010–2011 Number of Ongoing Loans (as of 31 Dec 2011) Contract Awards/Commitmentsa,b Disbursementsa

2010 ($ million) 200.7 308.4

37 2011 ($ million) 301.7 271.8

2010 ($ million) 9.8 26.3

5 2011 ($ million) 5.9 13.4

Number of Ongoing Grants (as of 31 Dec 2011)c Contract Awards/Commitments Disbursementsa

a,b

Project at Risk (%) Note: Totals may not add up because of rounding. a Includes closed loans that had contract awards or disbursements during the year. b Excludes policy-based lending/grants. c Includes only ADF and other ADB Special Funds.

7.9


The NECORD Project, which started in 2001, covered eight districts of the country. It repaired infrastructure such as roads, bridges, schools, and health centers; restored basic services, water supply, sanitation, and shelter; and provided livelihoods for 500,000 beneficiaries. With the end of the conflict in May 2009, in close consultation with the government and other development partners, ADB approved a supplementary loan to NECORD II, as further support to the government’s rehabilitation program for conflict-affected areas of the northern and eastern provinces. In April 2010, ADB approved a $150 million Conflict-Affected Region Emergency Project loan to assist emergent rehabilitation.

Cofinancing Cofinancing operations enable ADB’s financing partners, government or their agencies, multilateral financing institutions, and commercial organizations, to participate in the financing of ADB projects. The additional funds are provided in the form of official loans and grants, and commercial cofinancing, such as B loans, risk transfer arrangements, parallel loans, and cofinancing for transactions under the ADB’s Trade Finance Program. By the end of 2011, cumulative direct value-added official cofinancing for Sri Lanka amounted to $694.0 million for 34 investment projects, and $15.2 million for 33 technical assistance projects. In 2011, Sri Lanka received $8 million loan cofinancing from the OPEC (Organization of the Petroleum Exporting Countries) Fund for International Development and $2 million grant cofinancing from the Japan Fund for Poverty Reduction. A summary of projects with cofinancing from 1 January 2007 to 31 December 2011 is available at www.adb.org/countries/srilanka/cofinancing

Nonsovereign Operations As a catalyst for private investments, ADB provides direct financial assistance to nonsovereign public sector and private sector projects in the form of direct loans, equity investments, guarantees, B loans, and trade finance. Since its inception, ADB has approved a total of $280.1 million in nonsovereign financing, $270.1 million of which were for 12 projects in Sri Lanka. Total outstanding balances and commitments of ADB’s nonsovereign transactions in the country as of 31 December 2011 totaled $26.9 million, representing 0.5% of ADB’s total nonsovereign portfolio.

Procurement From 1 January 1968 to 31 December 2011, contractors and suppliers were involved in 197,338 contracts for ADB loan projects worth $109.78 billion. During the same period, contractors and suppliers from Sri Lanka were involved in 13,108 contracts for ADB loan projects worth $2,278.01 million. From 1 January 1968 to 31 December 2011, consultants were involved in 12,179 contracts for ADB loan projects worth $4.81 billion. During the same period, consultants from Sri Lanka were involved in 560 contracts for ADB loan projects worth $37.18 million.

Table 8.  Sri Lanka: Projects Cofinanced, 1 January 2007–31 December 2011 Cofinancing Projectsa   Grants   Official loans   Commercial Cofinancing Technical Assistance Grants a

No. of Projects 11 9 2 8

Amount ($ million) 298.13 37.78 48.00 212.35 5.95

A project with more than one source of cofinancing is counted once.

Table 9.  Sri Lanka: Share of Procurement Contracts 2010 Amount % of Item ($ million) Total Goods and Works 195.95 3.01 Consulting Services 4.75 1.14

2011 Amount % of ($ million) Total 210.71 2.95 4.57 1.07

Cumulative (as of 31 Dec 2011) Amount % of ($ million) Total 2,278.01 2.08 64.82 0.79

Table 10.  Sri Lanka: Contractors/Suppliers Involved in ADB Loan Projects, 1 January 2007–31 December 2011 Contractor/Supplier Maga Engineering (Pvt.) Ltd. Keagnam Enterprises Ltd. International Construction   Consortium (Pvt.) Ltd. LTL Proj. (Pvt.) Ltd., SRI Sierra Construction (Pvt.) Ltd.

V.V. Karunaratne & Company Consulting Engineers &   Contractors (Pvt.) Ltd. E-W Information Systems Ltd. Hyundai/Sanken Lanka JV

K.D.A. Weerasinghe and   Company (Pvt.) Ltd

Sector Transport and ICT Transport and ICT

Contract Amount ($ million) 84.80 72.82

Transport and ICT Energy Water Supply and Other   Municipal Infrastructure   and Services Transport and ICT

57.43 47.98

Multisector Education Water Supply and Other   Municipal Infrastructure   and Services

16.49 14.71

Multisector

13.47

39.79 33.90

13.66

ICT = information and communication technology.

Table 11.  Sri Lanka: Top Consultants (Individual Consultants and Consulting Firms) Involved in ADB Loan Projects, 1 January 2007–31 December 2011 Consultant Resources Development Consultants Ltd. IMC Worldwide Ltd., UK Oriental Consultants Company Ltd. Greentech Consultants (Pvt.) Ltd. ITDG Sri Lanka Institute of Local Governance Agromart Foundation Lanka Hydraulic Institute Design Consortium International (Pvt.) Ltd. PricewaterhouseCoopers Individual consultants

Number of Times Contracted 5 1 1 10 1 1 1 2 5 2 51

Contract Amount ($ million) 2.20 1.28 1.25 0.96 0.31 0.30 0.28 0.22 0.14 0.11 2.09


From 1 January 1968 to 31 December 2011, consultants were involved in 24,484 contracts for ADB TA projects worth $3.42 billion. During the same period, consultants from Sri Lanka were involved in 364 contracts for ADB TA projects worth $27.64 million. The following activities were initiated to enhance the governance aspect of procurement in 2011: • ADB supported the Road Development Authority with a grant of $225,000 to establish a central procurement unit in the Road Development Authority. Consultants were recruited and the unit is now functional. • On a request made by Institute for Construction Training and Development, ADB has fielded a team of consultants to carry out a needs assessment of the institute and the construction industry in Sri Lanka.

Table 12.  Sri Lanka: Top Consultants (Individual Consultants and Consulting Firms) Involved in ADB Technical Assistance Projects, 1 January 2007–31 December 2011 Consultant Roughton International Ltd., UK Institute for Health Policy Infotechs-Ideas Pvt. Ltd. PricewaterhouseCoopers Resource Management Associates (Pvt.) Ltd. Greentech Consultants (Pvt.) Ltd. International Water Management Institute Sahanaya National Council for Mental Health Institute for Participatory Interaction in Devt. Individual consultants

About Sri Lanka and ADB ADB Membership Joined 1966 Shareholding and Voting Power Number of shares held: Votes: Overall capital subscription: Paid-in capital subscription:

61,560 (0.58% of total shares) 101,050 (0.76% of total membership, 1.17% of total regional membership) $945.11 million $47.27 million

Contributions to Special Funds Resources Sri Lanka has contributed to the Technical Assistance Special Fund (TASF), which provides grants to borrowing members to help prepare projects and undertake technical or policy studies. Contributions to the TASF (committed):

$0.01 million

Yeo Kwon Yoon is the Executive Director and Wilson Leonard F. Kamit is the Alternate Executive Director representing Sri Lanka on the ADB Board of Directors. Rita A. O’Sullivan is the ADB Country Director for Sri Lanka. The Sri Lanka Resident Mission (SLRM) was opened in 1998 and provides the primary operational link between ADB and the government, private sector, and civil society stakeholders in its activities. SLRM engages in policy dialogue and acts as a knowledge base on development issues in Sri Lanka.

Number of Times Contracted 1 1 1 1 1 1 1 1 1 122

Contract Amount ($ million) 0.94 0.52 0.42 0.40 0.33 0.17 0.09 0.06 0.06 4.45

Contacts Sri Lanka Resident Mission 23, Independence Avenue Colombo 7, Sri Lanka Tel +94 11 267 4499 Fax +94 11 267 4488 adbslrm@adb.org www.adb.org/srilanka ADB Headquarters 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel +63 2 632 4444 Fax +63 2 636 2444 Ministry of Finance and Planning PO. Box 277, Colombo 1, Sri Lanka Tel + 94 11 248 4500/248 4600/248 4700 Fax +94 11 244 9823/242 2507/244 7633 www.treasury.gov.lk Useful ADB websites Asian Development Bank www.adb.org Asian Development Outlook www.adb.org/publications/series/asiandevelopment-outlook

The Sri Lanka government agency handling ADB affairs is the Ministry of Finance and Planning.

Annual Report www.adb.org/documents/series/adb-annual-reports

About the Asian Development Bank

Depository Libraries www.adb.org/publications/depositories/sri

ADB is a multilateral development bank owned by 67 members, 48 from the region and 19 from other parts of the world. ADB’s main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance (TA). In 2011, lending volume was $12.61 billion (104 projects), with TA at $148 million (212 projects) and grant-financed projects at $614 million (23 projects). In addition, $7.7 billion was generated in direct value-added cofinancing in the form of official loans and grants and commercial cofinancing such as B loans, risk transfer arrangements, parallel loans, and cofinancing for transactions under ADB’s Trade Finance Program. From 1 January 2007 to 31 December 2011, ADB’s annual lending volume averaged $11.34 billion. In addition, TA and investment grants funded by ADB and special funds resources averaged $755.3 million and $175.0 million in TA over the same period. As of 31 December 2011, the cumulative totals excluding cofinancing were $179.7 billion in loans for 2,423 projects in 42 countries, $5.0 billion in 186 grants, and $3.3 billion in TA grants, including regional TA grants. In this publication, “$” refers to US dollars. Figures are estimated by ADB unless otherwise cited. Data are as of 31 December 2011 unless otherwise indicated. Fact sheets are updated annually in April.

April 2012


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