Sri Lanka secures US$ 30 Million World Bank loan for renewable energy project

The Government of Sri Lanka has secured a loan of US$ 30 million from the International Development Association (IDA) of the World Bank Group to finance the implementation of the “Secure, Affordable and Sustainable Energy for Sri Lanka Project.”

The Financing Agreement was signed by Dr. Harshana Suriyapperuma, Secretary to the Treasury, and David N. Sislen, Division Director for Maldives, Nepal, and Sri Lanka of the World Bank Group, on behalf of the Government of Sri Lanka and the IDA, respectively.

According to the Ministry of Finance, Sri Lanka’s national power grid currently faces capacity limitations that hinder the use of renewable energy and create technical challenges. To address this issue, the new project has been designed to upgrade infrastructure and improve the integration of renewable energy into the national grid. This supports the government’s policy target of generating 70 percent of the country’s electricity from renewable sources by 2030.

The project will also be supported by a World Bank Group payment guarantee facility. This is intended to encourage greater private sector investment in renewable energy through various World Bank Group lending instruments.

The Finance Ministry stated that the project aims to increase the use of renewable energy, strengthen grid infrastructure to ensure a secure and affordable power supply, attract private sector participation, and improve institutional capacity to support long-term reforms in the power sector.

The total cost of the project is estimated at approximately US$ 60 million. Of this amount, US$ 30 million will be provided by the World Bank under the first phase, while the remaining US$ 30 million is expected to be provided under the second phase.

The project will be implemented by the Ceylon Electricity Board in coordination with relevant agencies, including the Ministry of Energy and the Ministry of Finance.