Sri Lanka gets $15m World Bank loan

Tamils and the government signed a peace deal

Sri Lanka has been granted a $15m (£9.5m) loan from the World Bank to help rebuild its economy after 19 years of civil war.

The loan is intended to help finance the government's new economic strategy "Regaining Sri Lanka", after a peace agreement earlier this month.

Peter Harrold, the World Bank country director for Sri Lanka, said the Sri Lankan government was "opening the door to a better standard of living for the people of this country".

The World Bank said its loan would be used to provide specific support for transport, telecommunications, petrol, power and water supply.

Peace hopes

The loan, from the World Bank's International Development Association, is interest free and matures after 40 years, with a 10 year grace period.

It follows peace talks between Sri Lanka's Tamil Tigers and the government, which has agreed to try to share power in a federal system.

Under the agreement, the Tamils would have autonomy in the north and east of the island, which are largely Tamil-speaking regions.

Mr Harrold said the World Bank funds would allow "the kind of sustained economic growth needed to reduce poverty and remove the social and economic tensions that exacerbate civil conflict".

Ravaged economy

Analysts have estimated Sri Lanka will need $500m over the next five years to rebuild its economy.

More than 60,000 people were killed during the civil war, which began in 1983 and ended in a ceasefire in February.

The island has already received pledges of $70m in humanitarian aid from a group of international donors, following a "peace support" conference in Oslo