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The President additionally underscored that traders venturing into this sector can anticipate a complete and unwavering coverage framework within the realm of renewable vitality.
President Ranil Wickremesinghe made these remarks throughout his handle on the “Inexperienced Know-how Discussion board” convened on January 15 in Davos, Switzerland. The occasion was coordinated by the Swiss-Asian Chamber of Commerce.
Talking on the theme of “Paving the way in which to an vitality safe Sri Lanka,” President Ranil Wickremesinghe highlighted the substantial potential of Sri Lanka’s renewable vitality sector. He additional outlined the federal government’s initiatives over the previous two years to determine an investment-friendly setting within the renewable vitality sector.
Emphasizing Sri Lanka’s dedication to addressing local weather change, President Ranil Wickremesinghe elaborated on numerous measures, together with the “Tropical Belt Initiative,” introduced on the COP28 convention in Dubai.
Highlighting Sri Lanka’s dedication to sustainable and inexperienced improvement, the President emphasised the nation’s formidable plans and willpower to realize net-zero emissions by 2050.
President Ranil Wickremesinghe underscored the pivotal function of the speedy renewable vitality plan, describing it as a key element of Sri Lanka’s complete efforts in the direction of sustainable improvement and an important step in making certain vitality safety.
Following is the complete speech delivered by President Ranil Wickremesinghe on the Inexperienced Know-how Discussion board in Davos, Switzerland.
I thank the Swiss Asian Chamber of Commerce and their companions in organising this occasion for the invitation to talk at the moment.
Background: Inexperienced Vitality and Local weather Considerations
There may be an pressing want for acceleration of worldwide actions in the direction of local weather change mitigation. There have been a number of world boards which have resulted in quite a few commitments in the direction of this finish. Nevertheless, actions have fallen drastically in need of commitments.
The fallout of this failure in world management is borne largely by growing nations of the worldwide south. When intervals of drought prolong past regular, undermining agricultural manufacturing, our meals safety is in jeopardy. When hydropower will get disrupted attributable to delayed monsoons, our vitality safety is in jeopardy. Droughts are sometimes adopted by a deluge, resulting in flash floods and landslides, disrupting lives and livelihoods of under-privileged communities particularly.
It is vitally evident that there’s a disproportionate influence of the opposed outcomes of local weather change on growing nations. This brings to gentle the difficulty of local weather justice and the necessity for a stronger contribution from the superior economies in the direction of adaptation and mitigation efforts within the world south.
That being stated, Sri Lanka will forge forward with its efforts in the direction of local weather mitigation. Now we have additionally not too long ago launched the Tropical Belt Initiative on the COP28 in Dubai – this creates a framework for catalysing personal funding in forests, vitality, oceans, mangroves, within the nations of the tropical belt.
At present I wish to give attention to one key side of such efforts, which is our drive in the direction of renewable vitality.
Renewable Vitality in Sri Lanka: Constructing on Historical past
In reality, Sri Lanka is a rustic with a protracted historical past of renewable vitality. Since independence Sri Lanka developed an in depth community of hydropower, commissioning its first main hydro-power plant in 1950. Hydropower was capable of present for many of the nation’s vitality wants till the Nineties. Even at the moment, hydropower accounts for round 40% of Sri Lanka’s put in electrical energy era capability.
With hydropower largely exploited to the optimum ranges, there was an elevated effort to incorporate wind and solar energy era to the nationwide grid. The federal government is now accelerating this course of to make sure that by 2030, 70% of Sri Lanka’s electrical energy wants are fulfilled by renewable vitality sources.
To achieve this goal requires a big funding of as much as USD 11.5 billion. Nevertheless, till not too long ago the framework for personal funding within the renewable vitality sector has not been very conducive. During the last 2 years a number of measures have been taken by the federal government to right these shortcomings and guarantee an optimum funding local weather for renewable vitality is in place.
Monetary Reform
Step one was to make sure price reflective pricing. Between 2014 and 2022 electrical energy tariffs had not been adjusted. This resulted in main money move issues for the Ceylon Electrical energy Board that generally led to fee delays to energy suppliers. Nevertheless, from August 2022 we have now shifted to a cost-reflective pricing construction. Accordingly, electrical energy tariffs are revised each quarter to mirror prices on a ahead wanting foundation.
The CEB, which has lengthy been a loss making entity, returned a revenue in 2023, enabling it to settle vital ranges of previous debt together with some stability sheet structuring. The corporate now has a robust stability sheet, a far stronger money move place, and a pricing construction that ensures liquidity.
Rigidities within the feeding tariff has additionally been a priority of previous traders. Nevertheless, this has additionally been addressed with higher flexibility being launched to the tariff choices, together with decisions between mounted tariff and variable tariff formulation.
Along with inner reform, we’re additionally setting up the framework to draw inexperienced financing. Sri Lanka has developed the Street Map for Sustainable Finance, Inexperienced Finance Taxonomy, the SDG Investor Map and the Inexperienced Bond Framework, that’s at the moment below formulation, creates the enabling setting for Sri Lanka to have a strong engagement in local weather finance. The supply of sustainable finance will likely be an added enhance for renewable vitality investments in Sri Lanka.
Legislative Reform
There have additionally been legislative obstacles to giant scale personal funding within the renewable vitality sector. These authorized hurdles have additionally been cleared via vital amendments to the Electrical energy Act launched in 2022.
Institutional Reform
Thirdly, the federal government is within the closing levels of implementing unbundling of the Ceylon Electrical energy Board. It will end in higher monetary and operational autonomy for the distribution, era, and transmission arms of the CEB, leading to competitors and transparency. While personal participation in era is already obtainable, the unbundling course of will open up alternatives for personal participation in distribution as effectively.
This main reform, applied with the help of the Asian Growth Financial institution, will make sure the CEB operates on the frontier of effectivity, delivering the very best end result for customers and probably the most aggressive and environment friendly producers of electrical energy. The draft laws for this reform was already been printed final month.
Infrastructure Enhancements
The ambition of 70% electrical energy from renewals additionally requires improved system effectivity and upgrades to combine extra renewable vitality, notably from 2026. Investments will likely be required in storage, transmission, and distribution, together with the continued personal investments in era. Plans for this integration as much as 2030 are in place and have begun implementation.
Future Outlook
Following the foremost reforms applied within the vitality sector within the final 2 years, there was renewed curiosity on this sector. There are already giant scale photo voltaic and wind energy tasks which have commenced implementation. A significant Indian participant has commenced implementation of a 350MW wind energy plant that’s anticipated to be commissioned in 2025. The identical participant is contemplating an additional USD 750 million funding in wind energy.
Wind energy is a serious alternative for Sri Lanka. A latest World Financial institution report signifies that off-shore wind energy particularly has the potential to generate energy far higher than Sri Lanka’s necessities. Contemplating this, Sri Lanka and India are in superior levels of talks relating to grid inter-connection to allow Sri Lanka to export surplus electrical energy notably to the quick rising industrial belt within the Southern a part of India. There may be additionally great potential for the event of inexperienced hydrogen in Sri Lanka.
Conclusion
Sri Lanka has formidable plans to fulfil its sustainable, inexperienced improvement agenda. By 2050 the nation has dedicated to reaching web zero. The accelerated renewable vitality plan is a key element of this total effort and can be a vital step on the trail in the direction of vitality safety. Renewable vitality may also drive down prices of era since at current Sri Lanka is compelled to depend on excessive price heavy fuels through the dry season. Sri Lanka is within the course of of building a global local weather college, which can proceed to unlock alternatives in inexperienced vitality.
It’s clear that Sri Lanka’s renewable vitality coverage route is underpinned by a number of motivations and drivers. Due to this fact traders can count on a excessive diploma of coverage continuity on this sector going ahead as effectively. That is the very best time to put money into Sri Lanka’s renewable vitality journey, and I’ve little question such investments will generate vital worth for shareholders and Sri Lanka’s customers over the following a number of a long time.
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