The World Bank has announced an $800 million aid package for Sri Lanka. The money will be used to rebuild areas of the country devastated by two decades of civil war.
The aid package is the largest Sri Lanka has received since the government and Tamil Tigers rebels signed a truce more than a year ago and embarked on peace talks.
The World Bank said the two sides' commitment to lasting peace and economic reforms have paved the way for the massive increase in assistance.
Six rounds of talks have been held so far, with both the government and the rebels expressing their determination to pursue a lasting peace. They have also agreed on a series of projects to rebuild war-ravaged regions in the North and the East of the country, from where the rebels waged their struggle for a separate homeland for the minority ethnic Tamil community.
A World Bank statement said the aid will be used to restore health services and water supplies in the North and East, where civic infrastructure has virtually collapsed during the long years of conflict. It will also help to rehabilitate tens of thousands of refugees who fled the area during the war but have now started to return.
In the past year, the government and the Tamil guerrillas have stressed the need to speed up humanitarian projects in the war-ravaged areas. But a lack of funds has slowed the implementation of such projects.
Economists said the World Bank loan will also help to increase investor confidence in Sri Lanka, where the economy has been weakened by the requirements of military spending.
Sri Lanka said it needs millions of dollars in financial assistance to put the economy back on its feet. Besides aid agencies, the government has also appealed to the international community for help. Japan is hosting a donors' conference in June, and hopes to raise more money for Sri Lanka's reconstruction from several countries that are backing the peace process.