US$30 mn WB facility to accelerate SL’s shift to 70% renewables

Sri Lanka has signed a US$ 30 million financing agreement with the International Development Association (IDA) of the World Bank to upgrade grid infrastructure and accelerate renewable energy integration under the Secure, Affordable, and Sustainable Energy for Sri Lanka Project, the Treasury said on Monday.

The agreement was signed on December 3 by Treasury Secretary Dr. Harshana Suriyapperuma and World Bank’s Division Director for Maldives, Nepal and Sri Lanka David N. Sislen.

The funding marks the first tranche of a US$ 60 million two-phase programme aimed at addressing long-standing grid constraints that have slowed the uptake of renewable power. The government plans to secure the second US$ 30 million tranche from the World Bank in due course.

The Treasury said insufficient grid capacity has hindered the country’s ability to absorb renewables, creating technical bottlenecks that undermine the government’s target of sourcing 70 percent of electricity from renewable energy by 2030.

The project will support infrastructure upgrades to facilitate renewable integration, strengthen system reliability and reduce the cost of power supply. It will also help mobilise private sector investment through a planned World Bank payment guarantee facility designed to de-risk renewable energy projects

According to the statement, the initiative aims to scale up renewable adoption, modernise grid operations, expand private participation, and build institutional capacity to sustain long-term sector reforms.

The loan will be on-lent to the Ceylon Electricity Board (CEB), which will implement the project in coordination with the Energy Ministry and other agencies, the Department of External Resources said.