The Asian Development Bank (ADB) has approved a USD 200 million loan to support the Mahaweli Development Program, Sri Lanka’s largest and most significant multi-purpose water resources initiative.
The project aims to channel excess water from the Mahaweli River to the drier northern and northwestern regions of the country. Through the Mahaweli Water Security Investment Program Stage 2 Project, more than 35,600 farming households in the North Central Province are expected to benefit from improved agricultural resilience and enhanced food security.
According to the ADB, the financing forms part of a joint co-funding arrangement that will also mobilise USD 60 million from the OPEC Fund for International Development and USD 42 million from the International Fund for Agricultural Development.
ADB Country Director for Sri Lanka, Takafumi Kadono, noted that although Sri Lanka has made progress in reducing food insecurity, it remains a key development challenge. He emphasised the need for higher agricultural productivity, crop diversification, and resilient irrigation systems supported by sustainable water resources.
The project will complete the North Central Province Canal (NCPC) irrigation network, enabling irrigation for around 14,912 hectares of paddy land and providing dependable water for commercial agriculture development. It includes the construction of tunnels, open and covered canals, and the installation of a supervisory control and data acquisition system to optimise operations. Once finished, the NCPC will link the Moragahakanda Reservoir with Huruluwewa, Manankattiya, Eruwewa, and Mahakanadarawa reservoirs.
Under the commercial agriculture component, 13 pressurised pipe distribution networks will be developed to support high-value crops across 5,039 hectares of upland fields. These networks will deliver efficient on-farm drip irrigation and ensure “water on demand” for farmers. The programme also aims to strengthen the entire agricultural value chain—from planting to post-harvest handling—and improve access to credit and extension services.
In upland areas, the project will promote perennial export-oriented crops such as mango, papaya, guava, and passion fruit. In lowland paddy areas, it will encourage seasonal diversification into crops such as mung bean, chilli, maize, groundnut, and various vegetables during the Yala season. Farmer organisations will also be supported to operate as business entities using smart, market-driven production systems.
The ADB noted that the project comes at a critical time, as Sri Lanka continues to recover from the severe impact of Cyclone Ditwah—the worst flood in 20 years and the deadliest natural disaster since the 2004 tsunami. The cyclone damaged over 160,000 hectares of paddy fields, nearly 96,000 hectares of other crops, and 13,500 hectares of vegetables.
