"Rehabilitating conflict-affected areas is essential for underpinning peace and bringing normalcy to the lives of the families there," said Peter Harrold, World Bank Country Director for Sri Lanka. "In addition to providing housing for about 200,000 poor and vulnerable people, we hope this program will pave the way and be a catalyst for the development of a sustainable housing program over the long term, "he said.

NEHRP's four year program will help reconstruct 46,000 houses in the Northern and Eastern parts of the country providing a cash grant of up to Rs150,000 for each family. The program will target the poorest and most vulnerable households. These include families with a monthly household income of less than Rs 2,500 per month, those who have had experienced multiple displacements during the two decade old conflict, women-headed households and those that include land mine victims. Key components of the program include technical assistance to ensure compliance with social and environmental safeguards, the training of construction workers, support for partner organizations and resolution of land disputes.

"Presidents in the North East consider the repair of housing a top priority," said Naresha Duraiswamy, Task leader for the project. "The technical assistance provided under the program will help meet the long term housing needs in the North East through improved construction standards, strengthened housing finance options, enhanced private sector involvement in housing construction and streamlined mechanisms to resolve property disputes, " he added.

The program is also expected to be a significant economic boost to the North East, generating employment opportunities for skilled and unskilled labor. It is expected that US$ 13.5 million, about one-fifth of the total investment required for NEHRP would be pumped back to the local economy as wage income It would also contribute to the training of skilled construction workers, consequently allowing the resumption of economic activity in the war devastated region through increased construction activity.

The program would be implemented in four phases over four years. A district would have to meet 50% of its housing target for a particular phase to trigger an early move to the subsequent phase. The beneficiaries will provide labor, land and upgrade the basic unit of 400 square feet where possible over time. As the NEHRP program begins building houses for the poorest conflict-affected families, it is hoped that interest by other donors to co-finance NEHRP will materialize to strengthen and take forward the program.

The North East Provincial Council (NEPC) in Trincomalee would be the implementing agency. A National Steering Committee under the chairmanship of the Secretary to the Ministry of Relief, Rehabilitation and Reconciliation would monitor the overall program. A Provincial Program Coordinating Committee would meet once every two months, and will be responsible for supervising NEHRP. The NEPC established the North East Housing Reconstruction Unit (NEHRU) manage the program, which would be chaired by Chief Secretary of the NEPC.

NEHRP is a key element of the World Bank Group's "Country Assistance Strategy (CAS)," and emphasizes peace as a precondition for sustained economic growth in Sri Lanka and as stated in the CAS "without peace, there is no prospect for development." The US$ 75 million is from the International Development Association, the concessionary arm of the World Bank, and is a loan with a 10-year grace period, a maturity of 40 years, zero interest, and a 0.75% service charge on the outstanding amount.