Power sector reforms: ADB approves $ 100 million loan for Sri Lanka’s power sector
China Daily: The Asian Development Bank (ADB) has announced a $ 100 million policy-based loan to further support Sri Lanka’s push to strengthen and modernise its power sector.
According to the ADB, the financing builds on earlier initiatives aimed at creating a more stable, efficient, and financially sustainable power sector.
The new loan will accelerate the implementation of the second subprogramme under the ADB’s energy sector reforms package, which focuses on unbundling the Ceylon Electricity Board (CEB).
The restructuring mandated by the Electricity Act of 2024 and its 2025 amendment will separate the CEB into independent successor companies handling generation, transmission, system operation, and distribution.
To improve financial sustainability, the programme will help implement cost-reflective tariffs and a comprehensive debt restructuring plan for the CEB.
It will support the new independent successor companies in the transparent allocation of existing debts.
“This will continue to strengthen their financial viability, enhance creditworthiness, and enable these companies to operate on a more sustainable footing,” the ADB said.
The ADB also added that it will provide an additional $ 2.5 million technical assistance grant to support programme implementation, build the capacity of successor companies, and help develop their business plans and power system development plans.
OSL take:
Sri Lanka’s power sector is fast-becoming a hotspot for foreign businesses/investors to explore opportunities given the ongoing economic expansion in Sri Lanka and in the power sector in particular. The ongoing expansion and the reforms process being moved by Sri Lankan authorities, aimed at further developing the country’s power industry, and the support extended by multilateral funding agencies are indicative of the increasing business potential in the sector. Given Sri Lanka’s target of achieving regional hub status, there’s much focus on further developing the country’s power sector to meet the increasing demand through sustainable energy sources. The renewable energy generation sector therefore has witnessed a quick growth with the Sri Lankan government also pushing for the expansion of the sector. The growth and profits recorded by businesses already engaged in Sri Lanka’s renewable energy generation sector and the interest shown by many leading foreign businesses/investors to explore the growing business/investment opportunities in the sector serve to further boost the interest of other foreign businesses/investors to also explore the opportunities in the country’s renewable energy generation sector.
| Article Code : | VBS/AT/20251209/Z_1 |