ADB OKs $200m loan to upgrade Sri Lanka’s power infrastructure

Half of the country’s generation last year came from thermal power.

The Asian Development Bank (ADB) has approved the Power System Strengthening and Renewable Energy Integration Project that grants Sri Lanka a $200m loan to enhance its power sector infrastructure.

Sri Lanka achieved universal household electrification in 2016. Peak electricity demand, including renewable sources, reached 2,800 megawatts (MW) in 2023 and is expected to surge by 2030. Despite a total installed capacity of 5,191 MW, thermal power plants still dominate the energy mix.

In a statement, ADB said $150m will be provided to Ceylon Electricity Board and $50m to Lanka Electric Company. Both will be guaranteed by the Democratic Socialist Republic of Sri Lanka.

The project aims to expand Sri Lanka’s 220-kilovolt (kV) and 132-kV transmission infrastructure with new transmission lines and substations, modernise the medium voltage distribution network, and upgrade grid protection systems.

It will also introduce Sri Lanka’s first grid-scale battery energy storage system at the transmission level, establish a renewable energy centre for forecasting and monitoring, and implement network automation systems.

“By expanding and modernising infrastructure and incorporating digitalisation solutions, this project will support the government’s goal of increased integration of renewable energy in the electricity mix, reduce power interruptions, and minimise transmission and distribution losses,” said ADB Country Director for Sri Lanka Takafumi Kadono.

Sri Lanka is targeting 70% electricity generation from renewables by 2030 and carbon neutrality in electricity generation by 2050.