According to the Bank’s website, Sri Lanka reached 100% household electrification in 2016. The peak demand of 2,415 megawatts (MW) recorded in 2023 is expected to reach 4,400 MW by 2030. The installed generation capacity in 2023, excluding rooftop solar, was 4,381 MW (48% fossil fuel based, 32% large hydro, 9% mini hydro, and 11% other renewables), generating 15,576 gigawatt-hours (30% coal, 29% large hydro, 21% nonconventional renewable energy, and 20% fuel oil). A few of the challenges in Sri Lanka's power sector can be attributed to high dependence on imported fossil fuels, and the slow progress in large scale competitive renewable energy development. The combination of these problems has led to high power generation costs, insufficient generation capacity to meet the growing electricity demand, limited private sector participation, and emergency power purchases. The International Monetary Fund has identified the power sector as one of the macro critical sectors requiring immediate attention.

The proposed Small Expenditure Financing Facility (SEFF) is considered the optimal modality for assistance because it can support both (i) urgent post project completion activities to secure the ongoing sustainability of outcomes under existing ADB projects in the context of Sri Lanka s ongoing economic crisis, and (ii) achievement of the government's ambitious renewable energy targets and Nationally Determined Contributions under the Paris Agreement, through the preparation of new ADB projects. Post completion support is urgently required to support the post completion activities to support sustainability of the outcome of the Moragolla Hydro Power Project delivered under the Green Power Development and Energy Efficiency Improvement Investment Program Multitranche Financing Facility (MFF) (as described in Section 8: First Activity below). The modality s streamlined processing requirements and suitability for supporting existing projects will facilitate the efficient delivery of post-completion activities that are beyond the scope of the MFF and the current financial capacity of the Ceylon Electricity Board (CEB) in the context of the ongoing economic crisis. Further, the power sector in Sri Lanka requires support to identify and develop new renewable energy projects and pilot test emerging technologies. The proposed SEFF will support future renewable energy development, including providing transaction advisory support as part of project preparation. The versatility of SEFF makes it the ideal modality to address the diverse needs of Sri Lanka's power sector.

Loan (Concessional ordinary capital resources lending): US$ 30.00 million

No contacts available at the time of disclosure.

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