$ 30 million IFC loan to support sustainable energy project
Daily FT: The Cabinet of Ministers has approved entering into a loan agreement to secure a $ 30 million loan from the International Finance Corporation (IFC) of the World Bank Group to finance the country’s Secure, Bearable and Sustainable Energy Project.
This financing, originally endorsed by Cabinet on 7 May, is aimed at supporting the Secure, Bearable and Sustainable Energy Project, designed to advance Sri Lanka’s energy security and clean power transition.
“Negotiations with the IFC are currently underway to finalise loan terms. Under the proposed structure, the funding will be channelled to the Ceylon Electricity Board (CEB) or one or more of its affiliated entities as a sub-loan to implement project components,” Cabinet Spokesman Minister Dr. Nalinda Jayatissa said at the post-Cabinet meeting media briefing recently.
He added that the loan will be obtained in compliance with financial rules and regulations recommended by the Public Debt Management Office, ensuring accountability and prudent debt handling as Sri Lanka continues to rebuild its energy sector and fiscal stability.
“Once concluded, the funding is expected to support key improvements in power system reliability, affordability, and sustainability,” he said.
The proposal was submitted by President Anura Kumara Disanayake in his capacity as the Finance, Planning and Economic Development Minister.
OSL take:
Sri Lanka’s power industry, especially the renewable energy generation sector, is a hotspot for business/investment opportunities, especially given the Sri Lankan government’s commitment to increase the renewable energy component in the country’s total power mix. The growth and profits recorded by businesses already engaged in the renewable energy sector indicates the increasing business potential in the sector. The funding pledges for renewable energy generation projects in Sri Lanka further indicates the business viability of ventures in the renewable energy sector. The increasing demand for power in the country in line with Sri Lanka’s role as an emerging business destination in the region, ensures a continuity in the renewable energy generation businesses, thereby further ensuring returns on investment (ROIs) and profits. Foreign businesses could also look at engaging in Sri Lanka’s renewable energy generation sector through partnerships or joint ventures with local businesses already in the sector.
| Article Code : | VBS/AT/20251113/Z_4 |