Sri Lanka Early Warning Update

Asian Development Bank Business Opportunities: Volume No. 4, March 2008

Thursday, April 17, 2008

This Bulletin is a periodic electronic update from the Bank Information Center (BIC) South Asia office to inform civil society about Asian Development Bank (ADB) projects before they are approved by the Board of Directors of the ADB. 

This Update covers project information, organized by sectors, covering Sri Lanka only.  The information is compiled directly from ADB’s Business Opportunities.

For feedback on the Early Warning Update or to subscribe, please contact:
Bank Information Center's, South Asia Office (New Delhi)
Phone: +91-11-2602 0143; Email: southasia@bicusa.org; Web: www.bicusa.org

For more information on specific projects, please contact the following at the ADB:
The Project Officer (contact details listed against each project). When emailing, also copy to: disclosure@adb.org. You may also contact the ADB Public Information and Disclosure Unit  (See: http://www.adb.org/Disclosure/contact.asp).

Project Cycle (ADB website for complete project cycle)

ADB’s Project Cycle

Project Identification/Preparation: ADB often provides grants called project/program preparatory technical assistance (PPTA) to help the government identify and prepare feasible projects. The summary is made available in the form of a project profile or project information document (PID).

During the early stage of the PPTA, an initial poverty and social assessment is conducted to identify people who may be beneficially or adversely affected. A technical assistance report is prepared as a recommendation for ADB to finance a technical assistance project.

If the project requires resettlement of people or might adversely impact the environment, or indigenous peoples, certain safeguard assessments are prepared during this stage. The results of these assessments are to be made available to affected people.  For more information on community rights under ADB safeguards and international best practices, see comparative matrices of MDB safeguard policies on BIC's website.

Project Examination: ADB examines project feasibility, first through a fact-finding mission and then through an appraisal mission. The fact-finding mission examines the project's technical, financial, economic, environmental, marketing, and management aspects and potential social impact. Detailed project risks and sensitivity analyses are carried out to assess viability of the proposed project and loan terms are discussed.

Following this, the Appraisal Mission conducts further field study, analyses and consultation, as required. The mission then prepares a loan proposal report and draws up a draft loan agreement for negotiation. After appraisal, the draft loan agreement and draft project proposal is submitted for review. Government is then called for negotiation with ADB. After negotiations with the government, the loan proposal is submitted to Board of Directors for Approval, through its Report and Recommendation of the President (RRP).

After Board approval, the document is sent to the borrowing country's Government for cabinet authorization following which the loan agreement is signed. The loan takes effect once certain conditions are met. The requirements and deadline for loan effectiveness are stipulated in the loan agreement.

ADB-assisted projects are implemented by the executing agency according to the agreed schedule and procedures as detailed out in the project administration memorandum. Implementation time generally ranges from two to five years but depends on the type and nature of the project. ADB's review missions assess the progress of project implementation by visiting it at least twice a year throughout the implementation period.

If a project has significant environmental or social issues, ADB will often require the borrower to submit regular monitoring reports, in addition to progress reports. Information on the project's implementation progress and status of development objectives and loan covenants is added to the project information document during this implementation phase.

For more information, refer to: Unpacking the ADB: A Guide to Understanding the Asian Development Bank

Commonly Used BOp Acronyms

TA:  Technical Assistance

AOTA: Advisory and Operational Technical Assistance Loans

PPTA: Project Preparatory Technical Assistance

RETA: Regional Technical Assistance

N:  New Project

EIA:   Environmental Impact Assessment

IEE:   Initial Environmental Examination

ADB Environmental Categorization

Category “A” Projects: Projects having severe environmental impacts are categorized as “A”. An EIA is required.

Category “B” Projects: Projects having some adverse environmental impacts are categorized as “B”. An IEE is required in order to determine whether an EIA also needs to be done. If not, then the IEE is the final environment document.

Category “C” Projects: Projects havening no environmental impacts are categorized as “C”. No IEE or EIA is required but environmental considerations are still reviewed.

Category “F1” Projects: Projects involving a financial intermediary or equity investment are classified as “F1”. The financial intermediary will apply an environmental management system if environmental impacts are expected.

Current Business Opportunities for Sri Lanka

Law, Economic Management and Public Policy
Project Name	Preparing the Deepening of Fiscal Management Reforms
Project Type and ID	PPTA: (N) SRI 38356-01
Executing Agency	Ministry of Finance and Planning
TA Amount (US$ ‘000)	300.00
Date of First Listing	03 March 2008
Objectives and Scope	The PPTA will support implementation of FMRA and, in particular, contribute directly to achieving the Government's revised target of a fiscal deficit of 5% of gross domestic product (GDP) and a national debt of 85% of GDP by 2010. It thereby assists in developing fiscal space creation to accommodate infrastructure spending and more generally effective use of budgeted expenditure. The PPTA will develop background studies that will serve to identify the design of a policy framework to provide (i) continuity of reforms initiated under FMRP (i.e., addressing pension liabilities), (ii) deepening of reforms following FMRP (i.e., application of public expenditure reviews, extension of value added tax) and (iii) complementary reforms following FMRP (i.e., developing internal audit functions of the Treasury, developing foundations of a service delivery framework).
Environmental Assessment	Not Required
Project Processing Stage	Staff Review Committee Meeting: Mar 2008.
Project Officer	Bruno Carrasco (632-5978) Governance, Finance and Trade Division, SARD bcarrasco@adb.org

Transport & Communications /Roads & Highways
Project Name	(N) Land Use Planning of the Southern Highway Corridor (piggybacked)
Project Type and ID	AOTA: RI 26522-03
Executing Agency	Road Development Authority
TA Amount (US$ ‘000)	300.00
Date of First Listing	12 February 2008
Objectives and Scope	The goal of the technical assistance (TA) is to assist UDA in developing guidelines under a development plan for this area, as well as for the 11 interchanges within this corridor to support the development objectives of the Southern Highway and national development programs. The overall objectives of the proposed study are to (i) prepare a long-term corridor development plan to guide and regulate future growth of the Southern Highway Corridor, (ii) set out appropriate strategies to implement the long-term objectives of the corridor development plan and to facilitate implementation of priority projects, (iii) identify priority projects and prepare prototype project proposals for intersection area development, and (iv) facilitate the implementation of priority projects. By the first quarter of 2009, the zoning and guidelines will be formulated, and at least three interchange development plans as centers of growth completed
Environmental Assessment
Project Processing Stage	For President's Consideration : 12 February 2008
Project Officer	Dewi N. Utami (632-6764), Transport and Communications Division, SARD; dutami@adb.org

Water Supply, Sanitation & Waste Management /Water Supply & Sanitation
Project Name	(R) Institutional Strengthening for Decentralized Service Delivery in the Water Sector
Project Type and ID	AOTA: SRI 41679-01
Executing Agency	National Water Supply and Drainage Board
TA Amount (US$ ‘000)	700.00
Date of First Listing	17 December 2007
Objectives and Scope	The TA will support the Government's and NWSDB's efforts to improve its management, especially financial management and regional operations within the context of the recent sector reforms and policies, including the establishment of a public utilities commission and its operationalization. Consequently, the impact of the TA has been defined to be 'Improved Operational Efficiency and Management Performance in the Water Sector'. Its outcomes are (i) 'NWSDB's Service Delivery Functions Decentralized' and (ii) 'Inclusive Independent Regulation Introduced'.
Environmental Assessment
Project Processing Stage	Fact-Finding Mission Completed : 30 November 2007
Project Officer	Tatiana Gallego-Lizon (632-6416); Urban Development Division, SARD; tgallegolizon@adb.org

The Bank Information Center (BIC) partners with civil society in developing and transition countries to influence the World Bank and other international financial institutions (IFIs) to promote social and economic justice and ecological sustainability. BIC is an independent, non-profit, non-governmental organization that advocates for the protection of rights, participation, transparency, and public accountability in the governance and operations of the World Bank, regional development banks, and IMF. For more information about BIC, see www.bicusa.org.

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