A Loan Agreement was signed today in Colombo between the Democratic Socialist Republic of Sri Lanka and the Kuwait Fund for Arab Economic Development whereby the Fund will provide a loan to the Democratic Socialist Republic of Sri Lanka in the amount of Kuwaiti Dinars 3 Million (Equivalent to about US$ 10.2 million) for financing the South Eastern University of Sri Lanka Development Project (Phase 1″B”)
The Loan Agreement was signed by Dr. P.B. Jayasundera, Secretary, Ministry of Finance and Planning on behalf of the Democratic Socialist Republic of Sri Lanka, on behalf of the Democratic Socialist Republic of Sri Lanka, whereas Mr. Hesham Al-Waqayan, Deputy Director General signed the Loan Agreement on behalf of Kuwait Fund.
The Project represents Phase I ”B” of a Development Plan, for the University of South Eastern Sri Lanka in Ampara District that aims to support the social development and economic growth of Sri Lanka by improving the quality of Degree Courses at the said University to reflect regional and national needs and at the same time increase student numbers, by developing the necessary academic infrastructure and introducing new demand driven degree programmes.
The Project consists of construction works for specialized colleges and modern facilities for the new University campus. The project also includes the execution of a big part of the infrastructure and external works, procurement and installation of furniture and educational and information technology equipment required for the computer center in addition to consultancy services for the design and supervision of the project implementation.
The total cost of the project is estimated at about Sri Lanka Rupees 1.483 Billion (equivalent to about KD. 3.965 million) of which the equivalent of about KD. 2.499 Million representing 63% of the total cost is in foreign currencies. The Fund Loan will cover about 75.7% of the total cost of the Project whereas the Government of Sri Lanka will provide the remaining balance of the cost or about 24.3% of the total cost and all necessary funds to cover any additional expenses.
The Loan is made for a term of 24 years, including a grace period of 4 years, and will be amortized on 40 semi-annual installments, the first of which will be due on the first date on which any interest or other charges on the loan shall fall due after the elapse of the grace period. The loan will bear interest at 1% per annum in addition to a charge of 0.5% for meeting administrative costs and the expenses of implementing the Loan Agreement.
With this Loan becoming effective, the Fund will have provided 12 loans to the Democratic Republic of Sri Lanka as the Fund has previously provided it with 11 loans to finance projects in various sectors totaling about KD. 49.6 million (equivalent to about US$ 169 million). The Fund has also provided to Sri Lanka a Technical Assistance in the amount of KD 250 thousand (equivalent to about US$ 852 thousand) to assist in the carrying out of a feasibility study for Moragolla Hydropower Project.