1. Foreign Aid Profile
1.1 Loan and Grant Commitments
The total amount of loans and grants commitments that were made to Sri Lanka in 2000 by all donors amounted to US$ 447 mn[1]. Of this total the composition of grants was only 22 percent while the rest 78 percent was loans. The major donors for the year 2000 were ADB (23%), Japan (19%), Germany (6%), and IDA (4%) and China (4%). The details of commitments of loans and grants are displayed in the table below.
Foreign aid commitments by Type 1995 - 2000
(US $ Mn)
Year / 1995 / 1996 / 1997 / 1998 / 1999 / Ave.95 - 99 / 2000
Loans / 369 / 881 / 562 / 607 / 640 / 612 / 351
Grants / 155 / 134 / 138 / 128 / 71 / 125 / 96
Total
/ 524 / 1015 / 700 / 735 / 711 / 737 / 447The following highlights were observed in the year 2000 commitments in comparison to the annual average of foreign aid commitments for the period of 1995-1999.
Total commitments declined by US $ 290 million or 39 percent.
Total loan commitments decreased by US $ 261 million or 43 percent.
Total grant commitments too decreased by US $ 29 million or 23 percent.
The decline in the total foreign aid commitments experienced in 2000 was due to the delay in the signing of agreements for number of loans, which were negotiated in 2000. Most of such loan agreements were with major donors such as government of Japan and ADB.[2]
Bilateral and Multilateral Aid Commitments 1995 - 2000
(US $ Mn)
Source / 1995 / 1996 / 1997 / 1998 / 1999 / Average95-99 / 2000
Bilateral / 406 / 561 / 473 / 328 / 301 / 414 / 190
Multilateral
/ 114 / 350 / 165 / 296 / 357 / 257 / 142Total
/ 520 / 911 / 638 / 624 / 658 / 671 / 332In comparison to the annual average aid commitments by bilateral and multilateral donors during 1995-99 period, following highlights were observed in 2000.
- Total bilateral commitments declined by US $ 224 Mn or 54 percent.
- Total multilateral commitments too decreased by US$ 115 Mn or 45 percent.
- Total foreign donor commitments declined by US$ 339 Mn or 50 percent.
In comparison to the previous years, the contribution made by the World Bank has considerably declined in 2000. The IDA commitment reduced to US$ 18.7 in 2000 from US$ 57.3 mn in 1999, which is a 67 percent reduction over one year. Germany has become a significant lender to Sri Lanka offering US$ 20.1 mn in 2000.
1.2 Loans and Grants Disbursements
The total amount disbursed under foreign loans and grants by all creditors and donors in 2000 was US $ 513 million. Of this total, loans represent 86 percent while the remaining 14 percent is grant funds. The three major donors viz. Japan, ADB and IDA accounted for US$ 330.3 mn representing 64 percent of total loan disbursements.
The details of disbursements of loans and grants are presented in table below.
Foreign Aid Disbursements by Type 1995 – 2000 (US $ Mn)
Year
/ 1995 / 1996 / 1997 / 1998 / 1999 / Ave.95 - 99 / 2000
Loans / 505 / 456 / 412 / 579 / 348 / 460 / 442
Grants / 182 / 144 / 131 / 114 / 109 / 136 / 71
Total
/ 687 / 600 / 543 / 693 / 457 / 596 / 513When compared with the annual average foreign aid disbursements for the period 1995-99 the following highlights were observed on the disbursements in 2000.
- Total disbursements decreased by US $ 83 million or 14 percent.
- Disbursements of loan funds declined by US $ 18 million or 4 percent
- Disbursement of grant funds further declined by US$ 65 and it is a 48 percent decrease over the annual average foreign aid disbursements during 1995 - 99.
1.3 Rates of Foreign Aid Utilization
The rates of utilization of loans disbursed by ADB , Japan (JBIC) and IDA from 1998 to 2000 are presented in the table below.
Title / Description / Currency in Millions / 1998 / 1999 / 2000ADB / Disbursements
Beginning undisbursed balance utilization Rate (% annual) / SDR* / 81
347
23 / 73
399
18 / 54
419
13
Japan / Disbursements
Beginning undisbursed balance
Utilization rate (% annual) / Yen** / 24
178
13 / 17
176
10 / 19
161
12
IDA / Disbursements
Beginning undisbursed balance utilization rate (% annual) / SDR / 71
314
23 / 37
255
14 / 34
239
14
*Million of Special Drawing Rights.
** Billion of Japanese Yen.
The utilization rates of loans from the ADB has declined in 2000 in comparison to 1998 and 1999. The utilized rate for Japanese loans improved by 2 percent in 2000 while the rate for IDA remained as the same in 1999. The following are the main reasons for reduction of loan utilization rates:
- Delays in award of contracts
- Delays in loan effectiveness.
- Delays in provision of counterpart funds.
- Problems relating to land acquisition etc.
1.4 Foreign Aid Commitments and Disbursements by Sector
2.Aid commitments and Disbursements by Major Donors.
2.1 Japan
The government of Japan committed US$ 87.3 mn through 8 agreements signed during 2000. Of this amount 57 percent (US$ 49.5 mn) were loan funds and the balance 43 percent (US$ 37.8 mn) were grants. Commitments by Japan accounted for 19 percent of total commitments by all donors in 2000.
The Grant Agreements signed during 2000 include the following.
Project.Amount (US$ mn)
1. Improvement of General Hospital – Ratnapura 5.3
2. Improvement of housing for low income people 7.3
3. Improvement of Tangalle Fishery harbour & training centre 3.7
4. Improvement of General Hospital – Ratanpura Phase II13.5
5. Improvement of Fishery Harbour & Training Centre - Phase II 4.3
Only one loan agreement was signed during 2000 for port of Colombo North Pier Development Project - Phase II for US$ 54.1 mn. There were three more loan agreements negotiated in 2000 and the signing of loan agreements were delayed till 2001 due to number of reasons. These commitments will be reflected in 2001.
Total disbursements by Japan amounted to US$ 206.3 mn, which is equivalent to 40 percent of total disbursements by all donors in the year 2000. Of this amount US$ 173.3 mn was loan funds and the balance US$ 33 mn was grant funds.
2.2 Asian Development Bank (ADB)
Asian Development Bank committed US$ 106.9 mn through 7 agreements in 2000[3]. Of this total 98 percent (US$ 104.8 mn) consisted of loans while the balance 2 percent (US$ 2.1 mn) are grants. The total commitments by ADB accounted for 24 percent, of total and commitments by all donors in 2000.
The main loan agreements signed in 2000 are:
ProjectAmount (US$ mn)
1. Forest Resources Mgt. Sector Project27.5
2. Secondary Education Modernization Project49.4
3. Water Resources Mgt. Project.19.4
4. Protected Area Management and Wildlife
Conservation Project11.5
The main grant agreements signed during the year include:
ProjectAmount (US$ mn)
1. Southern Province Rural Economic Advancement Project 0.8
2. Eastern Province Coastal Community Development Project 1.0
Total disbursements by the ADB amounted to US$ 77.6 mn, which was 15 percent of total disbursements by all donors. Of this amount US$ 72 mn consisted of loans representing 93 percent of total disbursements by ADB. The balance US$ 5.6 mn was in the form of grants.
2.3 World Bank (IDA & IBRD)
World Bank committed US$ 18.7 mn through 6 agreements signed in 2000. Of the total committed by World Bank 91 percent (US $ 17.3 mn) consisted of loans while the rest 7 percent (US$ 1.4 mn) was in the form of grants. Commitments by IDA in 2000 accounted for 4 percent of total aid commitments by all donors, which is a significant decline (66%) when compared to 1999.
Main loan agreements signed during 2000 were :
ProjectAmount (US$ mn)
1. Advance for PPF of Distance Learning Project 0.1
2. Legal & Judicial Reform Project17.1
3. Advance for preparation of CBSL Strengthening Project 0.6
Main grant agreements signed during 2000 include:
ProjectAmount (US$ mn)
- Institutional & Policy Frame Work
for Urban Air and Fuel Quality Improvement 0.3
2. Power Sector Restructuring Project0.8
Total aid disbursements by IDA amounted to US$ 45.9 mn which was 9 percent of total disbursements by all donors in 2000. Of this amount US$ 44.7 mn consisted of loans while the balance US$ 1.2 was in grants.
2.4 Federal Republic of Germany.
Germany committed US$ 29.3 mn through seven agreements signed during 2000. Of this amount US$ 27.7 mn (95 percent ) consisted of loans while the balance US$ 1.6 mn (5 percent) was in the form of grants. The commitments by Germany represented 7 percent of the total commitments by all donors in 2000. Then Germany became the third largest donor to Sri Lanka in 2000.
Grant agreements signed during 2000 include :
Project Amount (US$ mn)
1. Enterprise Information project. 0.3
2. Integ. Livestock husbandry on small farms in SL 0.1
3. Rehabilitation of displaced people in Jaffna 0.7
- Development of Fishing Community for sustainable
Management of their Natural Resources 0.2
- Drinking water supplies/sewerage disposal vavuniya. 0.2
- Upgrading of the Timber Industry. 0.2
The loan agreement signed in 2000 was for US$ 27.7 mn for the DFCC Bank Project – DFCC Phase III.
Total disbursements by Germany amounted to US$ 27.2 mn which was 5 percent of total disbursements by all donors in 2000. Of this amount US$ 20.1 mn (74 percent) consisted of loans while the rest US$ 7.1 mn (26 percent) was in the form of grants.
2.5 The Netherlands.
The total amount committed by the Netherlands during 2000 was US$ 16.6 mn which was 3.7 percent of the total commitments by all donors during the year. The total came as a grant for Upgrading of the Signaling and Communication System of the Coastline Railway, Kalutara Matara Project and Coastal Resources Management.
The total disbursements by the Netherlands accounted for US$ 2.5 mn which was 0.5 percent of total disbursements by all donors during 2000. All the disbursements were from grant funds.
2.6 Norway
Norway committed US$ 4.3 mn through six grant agreements, representing 1.0 percent of total commitments by all donors during 2000. The agreements signed were:
ProjectAmount (US $ mn)
1. Technical Assistance Fund1.5
2. Strengthening of the Marine Pollution
Prevention Authority1.1
3. Development of Higher Education Utilizing
Information Technology1.1
4. Industrial Networking Programme0.5
The total disbursements by Norway accounted for US$ 3.7 mn which was 0.7 percent of total disbursements by all donors in 2000 . All disbursements were from grant funds.
2.7 Sweden
Sweden committed US$ 9.3 mn through 5 grant agreements during the year 2000. The figure represented 2 percent of total commitments by all donors.
Main grant agreements signed during the year were:
ProjectAmount (US$ mn)
1. Development of Bond Market in Sri Lanka0.1
2. Alternative Highway Colombo - Kandy (Feasibility) 1.1
3. Research Cooperation 2000 –20026.7
4. Improvement of Quality Infrastructure for Fisheries Industry0.5
- Rehabilitation of Old Laxapana and
Polpitiya Hydro Power Project1.0
Total disbursement by Sweden accounted for US$ 3 mn during the year 2000. The figure was equivalent to 0.6 percent of total disbursements by all donors during 2000. All disbursements were in the form of grant funds.
2.8 United States of America (USA)
USA committed US$ 15.2 mn through 3 new agreements and Enhancements to the existing Projects during 2000. Of this total US$ 5 mn (33 percent) were loans while US$ 10.2 mn (67 percent ) were in the form of grants. USA commitments of funds accounted for 3 percent of total aid commitments by all donors of this year.
Grant agreements signed during 2000 were :
ProjectAmount (US$ mn)
Citizens Participation Project (Enhancement)0.5
Sustainable Economic Growth Programme (Enhancement)1.2
Humanitarian Assistance Program (HAP)(Enhancement)1.1
Increased competitiveness in the global Markets2.0
Donation of 45000 MT Wheat – 416(b)5.4
The only loan agreement signed was for US$ 5.0 mn for Import of Wheat under PL 480 Title 1 during 2000.
Total disbursements by the government of United States of America (USA) accounted for US$ 7.5 , which was 1.4 percent of total disbursements by all donors in the year. Of the total US$ 2.7 mn consisted of grant funds while the balance US$ 4.8 mn were from loan fund.
2.9 United Kingdom
There were no new commitments by U.K. in 2000. However, the disbursements an account of on going projects recorded US$ 3.9 mn which was 0.7 percent of the total disbursement by all donors in the year.
2.10 France
There were no new commitments by France in 2000 but there were disbursements amounting to US$ 2.3 mn which was 0.5 percent of total disbursements by all donors in the year. All disbursements were from loan funds.
2.11 Australia [4]
Australia committed US$ 5.2 mn through several programmes which falls under the fields of Humanitarian/Peace building, Human Resources Development, Governance, Environment and Health. This amount is equivalent to 1 percent of total commitments by all donors in 2000.
Total disbursements reported was US$ 9.3 mn (including US$ 4.3 mn under Global Assistance) which is 2 percent of all disbursements by all donors during the year 2000.
2.12 China
China committed US$ 17.7 mn through 6 agreements signed during 2000. Of this amount US$ 8.0 mn representing 45 percent were loan funds while the rest US$ 9.7 equivalent to 55 percent were in the form of grants. The total commitments by China represented 4.0 percent of total commitments by all donors in 2000. China became the fifth largest donor to Sri Lanka in 2000.
Two loan agreements signed in 2000 were.
ProjectAmount (US$ mn)
1. Economic and Technical Cooperation2.2
2. Economic and Technical Cooperation5.8
Three grant agreements signed in 2000 were
ProjectAmount (US$ mn)
1. Supply of General goods1.2
2. Economic & Technical Cooperation4.8
3. Muthurajawela Oil Tank Farm3.6
Total disbursements by China amounted to US$ 0.3 mn, which was only a 0.05 percent of total disbursement by all donors in 2000. All disbursements were from loan funds.
2.13 United Nations Development Programme (UNDP)
UNDP committed US$ 2.2 mn through 6 grant agreements signed during 2000. Commitment by UNDP amounted for 0.5 percent of total commitments by all donors in the year.
The main grant agreements signed in 2000 were :
ProjectAmount (US$ mn)
1. Judicial legal reform Programme0.1
2. Strengthening the capacity of the SLIDA0.5
3. Sustainable Development of Land Resources0.1
4. Mid country Rural Roads Network0.5
5. Conservation of bio diversity in rain forest0.7
6. Climate Enabling Activity Phase 20.2
Total disbursements reported by UNDP was US$ 5.0 mn which is equivalent to 1.0 percent of total disbursements by all donors in the year.
2.14 World Food Programme (WFP)
There were no new commitments by WFP during 2000 but disbursed US$ 0.9 mn which was only 0.2 percent of the total disbursements by all donors in the year. Total disbursement by WFP was from grant funds.
2.15 European Community (EC)
There were no new commitments or disbursements reported by EC during 2000.
2.16 Food & Agriculture Organization (FAO)
Total commitments by FAO in 2000 was US$ 0.7 mn through seven grant agreements and disbursements during the same year was US$ 0.4 mn.
2.17 International Fund for Agricultural Development (IFAD)
IFAD has made no new commitments during 2000. Total disbursement by IFAD accounted for US$ 4.2 mn representing 0.8 of the total disbursements by all donors in the year. All disbursements were from loan funds.
2.18 OPEC Fund for International Development
OPEC Fund for international development committed a loan of US$ 7.4 mn for Skills Development Project representing 1.5 percent of the total commitments made by all donors in 2000. The total disbursements by the OPEC Fund was US$ 0.6 mn which was 0.1 percent of total disbursements by all donors in the year.
2. 19 United Nations Population Fund (UNFPA)
UNFPA committed US$ 1.3 mn which is equivalent to 0.3 percent of total commitments by all donors during 2000 and total disbursements reported was US$ 0.9 mn, only 0.2 percent of all disbursements by all donors during 2000.
2.20 UNICEF
Total commitments by UNICEF during 2000 was US$ 5.2 mn which is 1.5 percent of total commitments by all donors during 2000. Disbursements reported during the same year was US$ 4.4 mn which is 0.8 percent of total disbursements by all donors in the year. Programmes under UNICEF assistance have mainly been focussed on the themes of protection of children and women, participation rights of children and sub-national capacity building etc.
2.21 Nordic Development Fund (NDF)
NDF committed US$ 6.8 mn through a loan agreement for Secondary Education Modernization Project in 2000. This amount represented 1.5 percent of total commitments by all donors in the year.
There were no disbursements reported by NDF in the year.
2.22 Kuwait.
Government of Kuwait Committed a loan of US$ 9.9 mn for the Rural Electrification Project. This amount represented 2.2 percent of total commitments by all donors in 2000.
Total disbursements reported by Kuwait accounted for US$ 1.3 mn which was 0.2 percent of all disbursement by all donors in the year.
2.23 Korea
There were no new commitments by the Government of Korea in 2000 but total disbursements reported by Korea accounted for US$ 9.6 mn which was equivalent to 2 percent of total disbursements by all donors in the year. All disbursements were from loan funds.
2.24 Saudi Fund for Arab Economic Development (Saudi Fund)
There were no new commitments by Saudi Fund in 2000 but US$ 0.7 mn has been disbursed by the Saudi Fund in the year representing 0.1 percent of total disbursements by all donors.
2.25Export Credit
The total amount of Export Credit committed in 2000 amounted to US$ 18.3 mn which was 4 percent of total commitments by all donors in the year. Total export credit utilization in the year 2000 was US$ 10.8 mn which was 2 percent of total disbursements by all donors in the year.
The main loan agreements signed in the year were:
LenderProjectAmount (US$ Mn)
- ABN – AMRO BankUpgrading Railway Signaling System 7.1
- ABN –AMRO Bank Rehabilitation of Old Laxapana and
Ltd (ABN)Polpitiya Hydro Power Project 10.9
3. Societe Generale (SCGL)Improvement of Government Film Unit 0.5
3. Foreign Aid to Sri Lanka – Allocated directly by Embassies
This chapter confined to several donor namely Norway, Sweden, the Netherlands and Australia who have provided information to ERD on their aid allocations directly, outside the country frame (OCF).
3.1.Norway
As per the available information Norway has disbursed a total amount of US$ 2.42 mn (NOK 21.9 mn). The bulk of these funds have been used by NGOs operating on social-economic development, peace and human rights projects.
Utilization of NOK-OCF funds are as follows.
Name of Project/Area of assistance / Expenditure in 2000(NOK millions)
Research Programme
/ 3.1Private Sector Development
/ 4.0Humanitarian Assistance
/ 1.5Social and Economic Development Peace and Human Rights Projects by NGOs
/ 10.2Peace and Democracy Projects
/ 3.1Total
/ 21.93.2 Sweden
Sweden disbursed SEK 67.0 mn (US$ 6.7 mn) OCF funds in 2000. About half of these funds (SEK 33.1 mn) have been utilized on supporting research activities under university system in Sri Lanka.
Name of Project/Area of assistance / Expenditure in 2000(SEK millions)
Export Development Programme (EDP) / 5.2
Start and Improve Your business (SIYB) / 4.0
Villippu Programme (YA - TV) / 1.1
Research Programme/Sarec 2000-2003 / 14.8
Research Programme Universities (1997 – 1999) / 18.3
Fisheries Industry Upgrading I / 0.4
ASMR 2000 (Human Rights and Democracy) / 7.8
MSF Jaffna / 2.7
UNICEF (Addl) / 4.0
ICRC / 5.3
UNDP Drug Abuse Monitoring System / 0.7
Life and Peace Institute (LPI) / 0.7
Swedish NGO Support through Swedish NGOs / 2.0
3.3 The Netherlands
The Netherlands disbursed a total amount of Guilders 1.3 mn (US$ 7.5 mn) in 2000. The bulk of these OCF funds were in favour of social development, Peace building and humanitarian activities.
Name of Project/Area of assistance / Expenditure in 2000(Guilders – million)
Humanitarian Advisor / 0.5
SANASA Development Project / 2.6
MSF Programme 2000 / 0.6
Emergency Relief for Women / 0.6
R&R&R/Care the voice Project / 0.6
ICRC Appeal 2000 / 3.7
UNHCR Appeal 2000-2001 / 4.0
Framework for Relief, Rehabilitation and Reconciliation / 0.6
Institute of Policy Stucies / 0.4
Total / 13.6
4.Highlights of Project Completion Reports
The government received a number of project completion reports and evaluations done in 2000. Several such reports are summarized and included below. These summaries included sections on basic information on the project, project performance and the lessons learnt on the completion of the project.
4.1 Second Water Supply & Sanitation Project - ADB
Basic Information
This ADB funded project aimed to:
i)provide safe and reliable water supply and sanitation services for 440,000 people in 16 towns in Sri Lanka's Central and Western regions;
ii)help the National Water Supply and Drainage Board (NWSDB) to improve its operational efficiency and financial viability;