New Delhi: The Asian Development Bank (ADB) approved a $200 million loan to improve Sri Lanka’s power transmission and distribution networks, facilitating the integration of renewable energy sources into the national grid, an ADB press release stated.
The Power System Strengthening and Renewable Energy Integration Project will help the country transition to a more sustainable energy mix, reducing its reliance on thermal power plants. According to ADB, the project reflects Sri Lanka’s significant progress in advancing power sector reforms for financial sustainability, cost recovery tariff revisions, and competitive renewable energy development.
ADB Country Director for Sri Lanka Takafumi Kadono said, “Driving power sector reforms, combined with targeted infrastructure interventions, is essential to facilitate competitive renewable energy development and reduce power generation costs.”
“By expanding and modernizing infrastructure and incorporating digitalization solutions, this project will support the government’s goal of increased integration of renewable energy in the electricity mix, reduce power interruptions, and minimize transmission and distribution losses,” he added.
Sri Lanka achieved universal household electrification in 2016. However, with peak demand reaching around 2,800 megawatts in 2023, and projected to grow significantly by 2030, the country’s power system faces significant challenges.
While Sri Lanka’s total installed power generation capacity reached 5,191 MW in 2023, about 50% of the electricity generated was from thermal power plants. The government aims to generate 70% of electricity from renewables by 2030 and carbon-neutral electricity by 2050, the release added.