Sri Lanka secures US$55.9 million in foreign funding to boost solar energy sector

Colombo, July 14 (Daily Mirror) - Sri Lanka is set to receive a combined foreign financing package of nearly US$55.9 million to strengthen its solar power sector and expand renewable energy access through a new ground-based solar power consolidation project.

The Cabinet has approved entering into loan and grant agreements with the Asian Development Bank (ADB), the European Union (EU), and the Japan Fund for the Joint Credit Mechanism to implement the “Project on Ground-Based Solar Power Consolidation and True Net Metering.”

The financing package includes a US$35 million concessional loan from the ADB, a EUR 15.4 million grant from the European Union, and a US$5.5 million grant from the Japanese Fund for the Joint Credit Mechanism.

The project aims to address challenges faced by small and medium-scale renewable energy producers by creating a more efficient system for managing, distributing, and integrating solar power generated by independent power producers into the national electricity network.

The move follows Cabinet approval granted in November 2025 to begin negotiations with international development partners on financing arrangements for the project.

The agreements were approved based on the outcome of negotiations with the ADB and other funding agencies, subject to the terms and conditions of the ADB loan facility. The initiative is expected to support Sri Lanka’s efforts to increase renewable energy generation and improve the country’s clean energy infrastructure.