The Cabinet of Ministers has approved a proposal to obtain a US$ 60 million loan facility from the OPEC Fund for International Development (OFID) to support the second phase of the Mahaweli Water Security Investment Programme.
The proposal, submitted by President Anura Kumara Dissanayake in his capacity as Minister of Finance, Planning and Economic Development, seeks approval to enter into a loan agreement with the OPEC Fund.
According to the government, the OPEC Fund has agreed to provide the financing through two loan components of US$ 48 million and US$ 12 million, following negotiations between the two parties.
The second phase of the Mahaweli Water Security Investment Programme, estimated to cost US$ 536.5 million, aims to improve food security in Sri Lanka’s dry-zone areas, strengthen water resource management, enhance climate resilience and reduce poverty.
The Asian Development Bank (ADB) has already agreed to provide US$ 200 million towards the project, with the remaining financing expected to be secured through a co-financing arrangement involving multiple development partners.
The project includes completing the remaining section of the main tunnel, constructing approximately 68 kilometres of canals and waterways, and developing an eight-kilometre section of the Ellapothana Irrigation Project canal.
It also involves establishing approximately 13 pressurised irrigation distribution networks to support high-value and field crops, alongside measures to improve farmers’ access to financial services and promote climate-resilient agricultural practices.
The Cabinet had previously granted approval on July 20, 2026, to conduct negotiations with the OPEC Fund to secure the US$ 60 million financing facility. (Newswire)
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