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The Asian Development Bank (ADB) today approved a $100 million policy loan to support and promote reforms aimed at improving the financial sustainability of Sri Lanka’s power sector.
The Power Sector Reform and Financial Sustainability Program will complement the IMF’s extended-term financing facility and improve the operational efficiency and competitiveness of the country’s power sector. The program will help create an enabling environment for private investment, promote renewable energy development, and modernize the power grid.
“Developing cost-competitive renewable energy and providing a reliable and affordable electricity supply, while establishing a transparent and independent regulatory framework for the power sector, will help Sri Lanka drive economic growth and cope with the current financial and economic crisis,” said Jaimes Kolantharaj, ADB’s Lead Energy Specialist. “The program will support reforms of the power sector under the Electricity Act, including institutional and regulatory reforms, and improve operational sustainability of the power sector.”
The plan will also support the development of renewable energy to accelerate the country’s transition to clean energy, as envisaged in Sri Lanka’s Nationally Determined Contribution.”
The program will help the government to carry out institutional reforms in the power sector, establish independent companies with clear functions, and support strengthening corporate governance and financial sustainability. The program will support regulatory reforms through the implementation of a new national electricity tariff policy to improve the financial sustainability of the sector through electricity prices that reflect costs.
To help accelerate renewable energy investment, the program will assist multiple initiatives under the Renewable Energy Expansion Plan 2023-2030. Key initiatives include regular revisions to feed-in tariffs for small power plants and rooftop solar users, facilitating the integration of renewable energy projects into the national grid, and effectively applying a competitive procurement framework for renewable energy projects. The program will support greater female participation in the power sector by developing policies to promote equal participation of women customers, women entrepreneurs, and women and disadvantaged community groups.
ADB will provide an additional $1 million technical assistance grant from its Technical Assistance Special Fund to support the implementation of the project, capacity building of the power company, development of a business plan, and an overall power system development plan.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, ADB currently has 68 members—49 from the region.
(News First)
(This article was originally published by News1st and has not been edited by SLM staff)
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