AIIB provides USD 52 Mn to strengthen Sri Lanka’s power grid

Colombo, Oct. 8 (Daily Mirror) - The Asian Infrastructure Investment Bank (AIIB) has signed a loan agreement with the Government of Sri Lanka to support the Kerawalapitiya–Port L Second Transmission Line Project, under which it will provide USD 52 million in sovereign-backed financing. The funding aims to enhance Sri Lanka’s power transmission capacity and unlock the country’s renewable energy potential, contributing to sustainable development.

The agreement was signed by Dr. Harshana Suriyapperuma, Secretary to the Treasury/Ministry of Finance, Planning and Economic Development, and Rajat Misra, Director General of AIIB’s Public Sector Clients Department (Region 1), in the presence of Eng. Kumara Jayakody, Minister of Energy, and Dr. Anil Jayantha Fernando, Deputy Minister of Economic Development. AIIB President Jin Liqun also attended the high-level signing during his visit to Sri Lanka.

Established in 2016, AIIB is a multilateral development bank dedicated to financing “Infrastructure for Tomorrow” with sustainability at its core. The bank, which now has 110 approved members worldwide and a capital of USD 100 billion, is AAA-rated by major international credit rating agencies. AIIB collaborates with partners to mobilize capital and invest in infrastructure and other productive sectors, fostering sustainable economic growth and enhancing regional connectivity.

The project involves the design, supply, constructing, testing, and commissioning of a 220kV single-circuit underground cable system linking the Kerawalapitiya Switching Station to the Colombo Port L Grid Substation. As the second underground cable on this route, it will complement the first line commissioned in 2019, which will soon be insufficient to meet the projected electricity demand in the Greater Colombo area. The new transmission line is critical for ensuring uninterrupted power supply, maintaining grid stability, and enabling the evacuation of renewable energy from the northern and eastern regions towards major load centers in Colombo.

Once operational, the project is expected to benefit local communities, urban services, and businesses in the Greater Colombo development area by providing a stable and reliable electricity supply. It will also directly support the growing power needs of the upcoming special economic zone, while indirectly reducing the risk of major blackouts—delivering considerable economic and social benefits.

This project stands as a strong testament to the deepening partnership between AIIB and Sri Lanka, a founding member of the Bank. So far, AIIB has supported five transformative projects in the country, with a total financing of USD 534 million across the energy, transport, and urban sectors - driving sustainable growth and development.