Hongkong and Shanghai Banking Corporation plc of London, Export Finance and Insurance Corporation (EFIC) Australia and the Hongkong and Shanghai Banking Corporation Limited (HSBC), Colombo have agreed to provide US$ 16.1 mn for the implementation of the Sustainable Water Assistance Management Project Phase II. The project will be financed with two loans. The first loan in a sum of US$ 13.7 mn will be provided by the Hongkong and Shanghai Banking Corporation plc of London and Export Finance and Insurance Corporation (EFIC) Australia under the Australian Export Finance Facility. The second loan in a sum of US$ 2.4 mn will be provided by the Hongkong and Shanghoi Banking Corporation Limited (HSBC), Colombo under a Commercial Finance Facility. The original proposal under this project considered in 2004, was to supply 10,000 solar powered drip irrigation systems to the rural smallholder farm families in the dry zone to improve their livelihood. Since it was a new technology, it was decided to implement the project in two phases. Phase I of the project to supply 5,000 solar kits commenced in 2005 and completed in 2007. It helps the beneficiaries to achieve high productivity and yield with low cost method of drip irrigation. Based on the progress of Phase I of the project the Ministry of Agriculture Development and Agrarian Services has proposed to implement Phase of the project to supply the balance 5,000 solar powered drip irrigation units. The objective of Phase II of the project is to increase crop production and productivity of agricultural land by establishing solar powered drip irrigation systems in areas where water scarcity has become an acute problem and thereby increasing the income and living standards of 5,000 farm families in these areas. The Ministry of Agriculture Development and Agrarian Services will implement the project through a concessional credit scheme to be operated through the banking system. The loan agreement under the Export Finance Facility was signed by Dr. P. B. Jayasundera, Secretary, Ministry of Finance and Planning on behalf of the Government of Sri Lanka and Mrs. Kathy Klugman, Australian High Commissioner, Australian High Commission, Colombo on behalf the Hongkong and Shanghai Banking Corporation plc of London and Export Finance and Insurance Corporation (EFIC) Australia. The loan agreement under the Commercial Facility was signed by Dr. P. B. Jayasundera, Secretary, Ministry of Finance and Planning on behalf of the Government of Sri Lanka and Mr. Trebine Fernandopulle, Deputy Executive Officer on behalf of Hongkong and Shanghai Banking Corporation Limited (HSBC), Colombo.