Sri Lanka decides rates for variable and fixed tariffs made available for renewable energy projects
Daily FT: Power and Energy Minister Kanchana Wijesekera said yesterday that a 20-year variable and fixed tariffs were made available from 13 June to 13 September 2023.
He said a 20-year variable feeding tariff for new renewable energy developments up to 10 MW is made available from 13 June and the new tariffs are only applicable for new power purchasing agreements (PPAs).
“The rates for variable and fixed tariffs made available by applying economic parameters to the formula from 13 June to 13 September 2023,” Wijesekera added.
According to him, the developers will have the option to pick either the fixed tariff or the variable tariff at the signing of the PPA and will not be able to switch after signing.
“Rates paid for every PPA signed on the variable tariff scheme will be changed every three to six months over the 20 years, factoring the interest rates and other parameters taken to calculate the formula,” he said.
However, the Minister said the rates made available at the signing of fixed tariff PPAs will remain unchanged for the full 20 years.
Sri Lanka’s power sector, especially the renewable energy generation sector, has become a hot spot for business/investment opportunities. The policy of the government of Sri Lanka to promote clean and renewable energy projects with the aim of increasing sustainable energy generation in the country has resulted in the increase of business/investment opportunities in the power sector. The growth and business potential in the industry is seen by the interest shown by foreign businesses/investors in investing in the renewable energy generation sector. India’s Adani group has already signed agreements to carry out a 500MW renewable energy plant in the Northern Province. Local businesses also engaged in the renewable energy sector have also recorded profits, indicating the lucrative nature of the business in Sri Lanka. Foreign businesses/investors while exploring opportunities in the renewable energy generation sector, could also look at forming partnerships or joint ventures with local businesses engaged in the industry.
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