This second subprogram of ADB’s Power Sector Reforms and Financial Sustainability Program is linked to unbundling the Ceylon Electricity Board in to into independent successor companies for generation, transmission, system operation, and distribution.
“Sri Lanka has made important progress in stabilizing its economy and strengthening its fiscal position,” ADB Country Director for Sri Lanka Takafumi Kadono said in a statement.
“A well-functioning power sector is vital for the country’s continued recovery and sustainable growth
“This initiative will enhance power sector governance, foster private sector participation, and accelerate renewable energy development to drive sustainable recovery, resilience, and inclusive growth.”
The program will strengthen renewable energy development and private sector participation by enhancing transparency and supporting power sector entities that are financially sustainable and support competitive procurement for large-scale renewable energy projects.
“To improve financial sustainability, the program will help implement cost-reflective tariffs and a comprehensive debt restructuring plan for the CEB,” the ADB said in a statement.
“It will support the new independent successor companies in transparent allocation of existing debts.
“This will continue to strengthen their financial viability, enhance creditworthiness, and enable these companies to operate on a more sustainable footing.”
ADB will give a 2.5 million a grant from its Technical Assistance Special Fund to support program implementation, build the capacity of un-bundled companies, and help develop business and power system development plans.
The program will also promote gender equality and social inclusion.
It includes targeted support for vulnerable groups, such as maintaining lifeline tariffs and implementing measures to soften the impact of tariff adjustments and sector reforms.
