ADB backs Sri Lanka’s power reforms with $100m loan

Another $1m technical assistance will also be granted. 

The Asian Development Bank (ADB) has granted Sri Lanka a $100m policy-based loan to support reforms that aim to improve the financial sustainability of the country’s power sector. 

In a statement, the ADB said its Power Sector Reforms and Financial Sustainability Programme will complement the International Monetary Fund’s Extended Fund Facility arrangement and boost the operational efficiency and competitiveness of the country’s power sector.

“This programme will support reforms in the power sector introduced under the Electricity Act, including institutional and regulatory reforms and improve operational sustainability of the electricity sector,” said ADB Principal Energy Specialist Jaimes Kolantharaj.

This will also support the development of renewable energy to accelerate Sri Lanka's transition to clean energy, he added.

Under the programme, institutional and regulatory reforms will be supported to strengthen corporate governance and financial sustainability. Initiatives under the renewable energy expansion plans for 2023–2030 will also be covered to accelerate investments in clean energy. 

Aside from the loan, ADB will also provide an additional $1m technical assistance from its Technical Assistance Special Fund to support programme implementation, capacity building of electricity companies, the development of their business plans and overall power system development plans.