Manila, Philippines (BBN)– The Asian Development Bank (ADB) will provide US$100 million loan aiming to improve wastewater management system in the capital, Colombo of Sri Lanka.

The ADB’s Board of Directors has approved a $100-million loan package for a large-scale wastewater management project, including $80 million from its ordinary capital resources (OCR) and $20 million from its concessional Asian Development Fund (ADF), the ADB said on Tuesday, adding that the Sri Lanka government will cover the remaining cost of $16.6 million.

Colombo’s existing public sewerage system is old, limited in coverage, and plagued with technical, financial, managerial, and operational constraints and problems.

Around 1.5 million residents in Colombo will benefit from a large-scale wastewater management project, according to an ADB press statement.

To prepare the groundwork for the project, ADB provided a $500,000 grant and another $150,000 from the multi-donor trust fund under ADB’s Water Financing Partnership Facility. The technical assistance focused on developing the capacity of the Colombo Municipal Council (CMC), to plan, implement, and monitor the project.

The OCR loan carries a 25-year term, including a grace period of 5 years, and interest rate based on ADB’s LIBOR-based lending facility.

On the other hand, the ADF loan has a 32-year term, including an eight-year grace period, and an interest rate of one percent per annum during the grace period and 1.5 percent during the amortization period.

BBN/SS/SI/AD-30September09-2:40 am (BST)