Business

The Asian Development Bank (ADB) has sanctioned a loan of $200 million to assist the Mahaweli Development Program, which is the largest water resources project in Sri Lanka. This initiative is designed to move extra water from the Mahaweli River to the drier regions in the north and northwest of Sri Lanka. The second phase of the Mahaweli Water Security Investment Program will benefit over 35,600 farming families in the North Central Province by boosting the resilience of the agriculture sector and improving food security. ADB is leading the collaborative funding for this project, which is projected to attract an additional $60 million from the OPEC Fund for International Development and $42 million from the International Fund for Agricultural Development, along with ADB's financing. Takafumi Kadono, ADB Country Director for Sri Lanka, stated, “Although Sri Lanka has made strides in reducing food insecurity, it continues to be a challenge for the country.” He emphasized the need for increased agricultural productivity and crop variety to ensure food security, highlighting that having enough water resources and resilient irrigation systems is essential. The project will finalize the irrigation infrastructure for the North Central Province Canal (NCPC), expected to irrigate approximately 14,912 hectares of paddy fields and provide dependable water for commercial agriculture. It will also finalize the construction of tunnels and both open and covered canals. Additionally, a supervisory control and data acquisition system will be set up to enhance NCPC operations. Upon completion, the NCPC will link the Moragahakanda Reservoir to the Huruluwewa, Manankattiya, Eruwewa, and Mahakanadarawa reservoirs. The commercial agriculture development (CAD) component will establish 13 pressurized pipe distribution systems to ensure effective irrigation for high-value crops over 5,039 hectares of upland fields. These systems will enable on-farm drip irrigation and provide "water on demand" for farmers. The project aims to change agricultural production methods by creating a disaster-resilient value chain from planting to harvest and post-harvest processing. It will also improve access to financial services and agricultural training for farmers. In upland CAD regions, the project will encourage the growth of perennial crops with export potential, like mangoes, papayas, guavas, and passion fruits. For lowland paddy areas, it will support seasonal crop diversification into crops such as mung beans, chilies, maize, groundnuts, and various vegetables during the Yala cultivation season from April to September. Moreover, the project will help farmer organizations operate as business entities, using smart, market-driven production methods with customized access to financial services, support, and marketing through partnerships with both public and private producers. Sri Lanka faced severe flooding caused by Cyclone Ditwah in late November, marking the worst floods in two de...