Cabinet greenlights $60m OPEC loan for Mahaweli Phase 2 expansion

Sri Lanka's Cabinet of Ministers has given formal approval to a $60 million concessional financing agreement with the OPEC Fund for International Development, directing the funds toward Phase 2 of the Mahaweli Ganga development project.

The Mahaweli Ganga project remains one of South Asia's largest multipurpose river basin development schemes, designed to harness water resources for irrigation, hydroelectric power generation, and regional development. The second phase of the initiative builds on infrastructure established in earlier stages, focusing on expanding water management capabilities across key agricultural zones.

The OPEC Fund loan is expected to support critical components of Phase 2, including irrigation channel construction, water distribution systems, and related infrastructure development. As a concessional facility, the financing is offered on favorable terms intended to ease the burden on the national exchequer while advancing developmental objectives.

The approval marks another step in Sri Lanka's efforts to secure external financing for large-scale infrastructure projects. The government has been actively engaging multilateral and regional financial institutions to fund priority development initiatives amid broader economic constraints facing the island nation.

Photo: The Mahaweli River seen from the Sri Lanka-Japan Friendship Bridge at Hebarawa, Uva Province, May 2018. Aldshakya via Wikimedia Commons (CC BY-SA 4.0).