Sri Lanka secures US$57.4 Million for rooftop solar and virtual net metering project

Sri Lanka has signed agreements to secure a US$35 million concessional loan from the Asian Development Bank (ADB) and grants worth about US$22.44 million from the European Union and Japan for a rooftop solar and Virtual Net Metering project.

The project will be implemented from 2026 to 2030 by the Ministry of Energy, together with Electricity Distribution Lanka (Private) Limited (EDL) and Lanka Electricity Company (Private) Limited (LECO), to expand access to affordable and clean energy.

The financing package includes a US$35 million concessional loan from ADB, a €15.4 million grant from the European Union, equivalent to about US$16.94 million, and a US$5.5 million grant from the Japan Fund for the Joint Crediting Mechanism (JFJCM).

Under the project, EDL’s CEBAssist system will be upgraded with advanced metering infrastructure, a distributed energy resource management system and distribution control centres supported by an advanced distribution management system.

These upgrades are expected to digitalise EDL’s customer and operational services and improve the reliability of the electricity network by allowing power supplies to be restored more quickly after outages.

Smart meters and related infrastructure will also provide real-time information and control needed to increase the use of renewable energy and extend the benefits of solar power to more consumers. Through these improvements, EDL is expected to establish a more efficient, reliable and sustainable smart grid.

The project will also introduce Virtual Net Metering (VNM) to Sri Lanka for the first time.

Rooftop solar power systems with a combined capacity of 25 megawatts will be installed with financial support from the European Union. The systems are intended to reduce electricity costs for small and medium-scale entrepreneurs.

The solar installations will include advanced control technology that will allow the National System Operator to manage their electricity generation according to conditions and limitations on the national power network.

Within LECO’s service area, low-loss conductors will also be installed alongside the Virtual Net Metering scheme to improve the efficiency of the electricity distribution network.

High-capacity battery energy storage systems will be installed at distribution transformer level to increase the network’s ability to accommodate renewable energy and improve control over its management.

The project will place particular focus on the Negombo area, where LECO plans to support grid connections for commercial and industrial users with high electricity demand.

The improvements are also expected to strengthen the network to accommodate more renewable energy and improve the flexibility, resilience and reliability of electricity supply.

The loan and grant agreements were signed at the General Treasury in Colombo on October 1, 2026.

Secretary to the Ministry of Finance, Planning and Economic Development Dr. Harshana Suriyapperuma signed the agreements on behalf of the Government of Sri Lanka, while ADB Country Director for Sri Lanka Shannon Cowlin signed on behalf of the Asian Development Bank.

Virginie Laffeur-Tighe, Head of Partnerships of the Delegation of the European Union to Sri Lanka, and Naoki Kamoshida, Deputy Chief of Mission (Minister) of the Embassy of Japan in Sri Lanka, also attended the signing ceremony.