A deepening monetary disaster has emerged amongst photo voltaic and small hydropower producers, who’re reportedly struggling to service financial institution loans amid coverage and buying modifications by the Ceylon Electrical energy Board (CEB).
Business sources say producers have been hit by the suspension of energy purchases on weekends and public holidays, together with successive reductions in feed-in tariffs for renewable power.
The acquisition worth for a unit of solar-generated electrical energy has reportedly been decreased from Rs. 37 to Rs. 27, and later to Rs. 17, following the appointment of Minister of Energy and Vitality – Kumara Jayakody.
Banking sector sources warn that this case may pose a systemic danger to Sri Lanka’s banking sector, noting that a good portion of renewable power investments has been financed by way of credit score.
It’s estimated that almost 70% of capital invested in rooftop photo voltaic techniques, solar energy vegetation, and small-scale hydropower initiatives has been funded by way of financial institution loans.
Banks are reported to have prolonged loans to almost 150,000 people for rooftop photo voltaic installations, whereas round 360 traders working commercial-scale solar energy vegetation are additionally going through difficulties in assembly debt obligations beneath present circumstances.
Business estimates that almost Rs. 500 million is spent to assemble a hydropower plant to provide 01 MW of electrical energy, whereas the development price to provide 01 MW of electrical energy from solar energy is as excessive as Rs. 350 million, experiences say.
Though the Sri Lanka Sustainable Vitality Authority (SLSEA) not too long ago secured Cupboard approval for the Renewable Vitality Assets Improvement Plan 2025–2030, sector representatives declare prevailing coverage uncertainty may make the plan troublesome to implement.
Sri Lanka’s Nationwide Coverage on Renewable Vitality targets assembly 70% of electrical energy demand from renewable sources by 2030 and progressing in direction of carbon neutrality, however investor confidence is reportedly weakening, in response to experiences.
Some traders have additionally alleged problem in securing conferences with the present Minister to debate sector issues.
In the meantime, one investor, chatting with ‘Sri Lanka Mirror’ on situation of anonymity, claimed that Cupboard approval for the SLSEA plan was largely a procedural step linked to securing the following Worldwide Financial Fund (IMF) funding tranche, and that there’s restricted sensible dedication to develop renewable power era.
In the meantime, it’s reported that the CEB pays round Rs. 85 per unit for electrical energy generated from fossil fuels throughout peak demand, arguing that discouraging renewables may place extra upward stress on future electrical energy tariffs.
