Colombo, Sri Lanka, 16 June- ADB is helping to build sustainable livelihoods for vulnerable coastal communities in the Eastern Province of Sri Lanka through a loan for US$20 million signed today by the Government and the ADB.

The loan, for the North East Coastal Community Development Project, will help conflict-affected coastal communities in the three eastern districts - Trincomalee, Batticaloa, and Ampara - improve livelihoods on a sustainable basis and strengthen community management of natural resources. The project will also build government capacity for resource management and planning.

All project activities will be assessed to ensure that they support the peace process and contribute to postconflict reconciliation at community level in areas that have borne the brunt of two decades of civil
conflict in the country.

The project area embraces 550,000 people in 396 communities that border the open coast or major lagoon systems, with priority activities to be undertaken in 150 of those communities most in need. Coastal communities in the east of the country are characterized by high levels of poverty, weak and fragmented social institutions, inadequate and damaged physical infrastructure, and limited access to services and markets. The people have traditionally depended directly on the resources in the marine, lagoon, and land environments for their sustenance and survival.

Years of conflict have disrupted livelihoods, resulting in the loss of assets such as fishing boats and equipment, and household possessions, and has limited access to the natural resource base. The conflict also restricted mobility, affecting people's capacity for earning a living and curbed access to services and markets. The mobility restrictions and high overall poverty levels have encouraged overexploitation of the natural resource base and environmentally destructive practices. "The project moves beyond the provision of emergency assistance to development interventions to help people take advantage of the economic opportunities afforded by the peace process," says John Cooney, the ADB Country Director.

"It has also drawn lessons from other assistance taking place in the north and east of Sri Lanka in assisting vulnerable people to resume productive lives."

The project will focus on livelihood activities in agriculture, fisheries, agroforestry and related enterprises and services and provision of basic infrastructure at the community level to meet basic
needs.

It will also identify environmental hot spots in the three districts that affect livelihoods and the quality of life at the community level, designing activities to counter problems such as mangrove destruction, sand and coral mining, and uncontrolled solid waste dumping. A coastal resource management plan for the province will be prepared to establish a consistent framework for provincial coastal resource planning and management. The plan, among others, will encompass shoreline management and tourism development in the coastal zone. In addition, assistance will be provided to improve systems for resource management and enforcement of environmental laws, including capacity building for local government agencies to plan and coordinate interventions.

The project will also support the development of a more efficient and productive fishing industry along the east coast by rebuilding harbor facilities at Valaichchenai and Cod Bay that were badly damaged or neglected during the conflict period. Improved facilities will allow safe moorings and sea access year round for vessels, speed up refueling, and permit more efficient and hygienic fish handling. "Community consultation and participation are at the core of project planning and implementation so that any potential problems can be dealt with effectively at an early stage," adds Mr. Cooney.

"Community development activities will be programmed and carried out at the district level and below with coordination taking place at the provincial level. Activities will also be carefully phased so that the
project can adapt to the evolving peace process."

The total project cost is about $28.4 million, to which the Government of Sri Lanka will contribute $5.6 million and the beneficiaries $1.3 million. The Government of the Netherlands is providing a grant of $1.5 million to support capacity building in environmental protection and monitoring. ADB's loan accounts for 70% of the project cost and comes from its concessional Asian Development Fund, with a term of 32 years, including a grace period of eight years. Interest is 1.0% per annum during the grace period and 1.5% per annum subsequently. The Ministry for Relief, Reconstruction and Reconciliation with be the executing agency. The North East Provincial Council will be the lead implementing agency for the project, which is planned for completion at the end of 2009.