Sri Lanka’s Kaluganga Development Project had received an additional loan of Saudi Arabia Riyals (SAR) 60 million or nearly US $ 16 million from the Saudi Fund for Development, a recent communique from the Ministry of Finance and Mass Media said.

Kaluganga Reservoir has a capacity of 265 million cubic meters (MCM) of water and will divert 100 MCM annually to Moragahakanda Reservoir. Under this project, it is expected to develop new irrigable lands of nearly 3,000 ha (hectares) in the Kaluganga Basin.

“The unforeseen geological conditions in the foundations and necessary design revisions have led to price increase and it is noted that the funds available from the above donors is not sufficient to complete the balance work of the project” the statement added.

Thus SFD has agreed to provide an additional loan of SAR 60 million (US $ 16 million, nearly Rs. 2.56 billion) to finance a part of the shortfall. The Government of Sri Lanka has already entered into agreements with KFAED and OFID to finance a part of the balance of the shortfall.

Accordingly, the Loan Agreement has been signed on Wednesday, 18th July 2018 at the Ministry of Finance and Mass Media by Dr. R.H.S. Samaratunge, Secretary to the Ministry of Finance and Mass Media on behalf of the Government of Democratic Socialist Republic of Sri Lanka and Eng. Yousef Ibrahim Al Abdulrahman Al Bassam, Vice Chairman & Managing Director on behalf of the Saudi Fund for Development.

The communique added that the Kaluganga Development Project is currently being implemented by the Ministry of Mahaweli Development and Environment with the financial assistance of Saudi Fund for Development (SFD), Kuwait Fund for Arab Economic Development (KFAED) and OPEC Fund for International Development (OFID).