Japan continues supporting Sri Lanka’s anti-corruption and development efforts
September 28, Colombo (LNW): Japan has committed to fully supporting Sri Lanka’s anti-corruption efforts and development goals, a priority of President Anura Kumara Dissanayake’s administration.
Japanese Ambassador to Sri Lanka, Mizukoshi Hideaki, expressed this during a meeting with the Secretary to the President, Dr. Nandika Sanath Kumanayake. The ambassador reaffirmed Japan’s readiness to work closely with Sri Lanka, especially in combating corruption, which has been a central theme for the current administration.
In a significant development, the Japanese government announced the resumption of 11 stalled infrastructure projects in Sri Lanka, including key initiatives like the Kandy City Water Management Project and the Bandaranaike International Airport (BIA) Development Project. Other projects set to resume include improvements in healthcare, water supply, rural infrastructure, and the National Transmission and Distribution Network.
These projects, once stalled due to financial instability, will restart following Sri Lanka’s successful foreign debt restructuring, allowing Japan to continue its yen loans and funding for the country’s recovery efforts.
Ambassador Mizukoshi highlighted the near completion of several Japanese-funded projects, such as the first phase of the Habarana-Veyangoda transmission line and the Anuradhapura North Water Supply Project. Japan’s recent funding efforts will also help finalize payments for the completed Kelani Ganga New Bridge construction.
The resumption of funding follows a Memorandum of Understanding (MOU) signed between the Official Creditor Committee (OCC) and Sri Lanka on July 23, formalizing a bilateral debt restructuring agreement. Japan, which has been a strong supporter of Sri Lanka’s debt restructuring, co-chairs the OCC alongside France and India.
Ambassador Mizukoshi noted that Japan is the first country to resume financing for suspended projects, with an initial tranche of $75 million for the eleven projects. This move is expected to unlock additional financing from countries like Korea, Spain, and Germany, as well as multilateral agencies.
Japan’s total loan portfolio in Sri Lanka is valued at $2.36 billion, with another $1.1 billion committed over the next five years for ongoing projects. Since 1965, Japan has provided $8.8 billion in Official Development Assistance for 120 projects in Sri Lanka.
Relations between the two nations had been strained in recent years due to Sri Lanka’s previous government canceling a Japan-India development project. However, Japan’s resumption of funding reflects a renewed commitment to supporting Sri Lanka’s economic recovery following its financial crisis.
Currently, eleven projects valued at approximately $2.5 billion are being implemented under JICA loan assistance in sectors such as power, water supply, drainage, ports, transport, health, telecommunication, and rural development.
Despite Sri Lanka’s economic and political issues, JICA has continued to support various projects, including a $300 million technical cooperation project with the Ministry of Health to combat COVID-19. This project provided essential equipment and training to targeted hospitals.
A senior finance ministry official confirmed that Japan’s recession would not impact JICA projects in Sri Lanka, as these were prior commitments. The Anuradhapura North Water Supply Project, backed by JICA, will also proceed unaffected by Japan’s economic situation.
