AFD extends financial support to Sri Lanka’s economic development policy
As a result of a major aid reform, the French (official) Agency for Development (Agence Française de Développement or AFD) is poised for greater financial support to Sri Lanka’s economic development policy.
Under this reform, AFD is to increase its financing activity in middle income countries in ASIA including Sri Lanka, Martin Parent Country Director for Sri Lanka and the Maldives told the Business Times on the sidelines of a meeting with journalists in Colombo on Tuesday.
The increase in funding will permit the agency to work more, better, and in a more sustainable manner in the most fragile and vulnerable countries, he revealed.
He said that the French Agency recently approved a Euro 52 million loan to finance the Anuradhapura Integrated Urban Development Project.
The project will focus its efforts on developing the heritage and tourism potential of the city of Anuradhapura. The implementing agency of the project is the Ministry OF Megapolis and Western Development.
The aim is to integrate ancient heritage into a global plan as well as to create a new urban aesthetic and carry forward the legacy to the future generations, he pointed out.  The agency provides funds to developing country borrowers in the form of development loans, he said, adding that their first support, on request of the French Government, was Sri Lanka’s post-tsunami projects to the tune of Euro 89 million in 2005.
This financial assistance was provided for water supply, electricity, roads and bridges, community development, training projects in the island, he disclosed.
The total amount of funding committed for Sri Lanka up to now was around Euros 340 million since 2005, he told journalists attending the meeting.
Since then, AFD has committed up to now six projects , in the sectors of Water Supply, Sewerage, Electricity, Urban Development and via NGO, early childhood education, reproductive health and gender based violence, he added.
AFD is committed to increase its support to Sri Lankan government’s economic development policy, in the above sectors including sewerage, an urgent need to boost the economy and also in irrigation, fisheries and social protection, he related.
AFD’s financing is in line with the aim of supporting the country’s public policies: increase access to drinking water, energy efficiency and development of renewable energy.
The agency was authorised to develop its lending activity in Sri Lanka with a clearly defined mandate: to promote green and socially inclusive economic growth.
The objective is to commit between Euro 100 million to Euro 150 million a year to support the country’s developwment.
In the central part of the country, AFD is financing substations that will connect small-scale hydropower plants to the domestic grid.
In addition, it is financing the rehabilitation of the Ambatale water treatment plant including the replacement of outdated electromechanical equipment, improving the energy efficiency of drinking water supply in Colombo.
In the energy sector, it funds the installation of Grid Sub-Stations estimated at Euro 52 million in the central region. The agency is co-financing a project to rehabilitate the transmission network in partnership with the Asian Development Bank (ADB).
PROPARCO, AFD’s subsidiary dedicated to private investment, works with local banks via banking intermediation. At the end of 2014, its commitments stood at US$ 90 million.