Sri Lanka approves US$80.5 million solar power project
Colombo (ANTARA) - Sri Lanka’s Cabinet on Tuesday (14 July) approved loan and grant agreements for a project worth US$80.5 million (US$1 = Rp18,099), which aims to expand rooftop solar power plants, introduce a virtual net metering system, and modernise the electricity distribution network, Xinhua reported.
The financing package includes a soft loan of US$35 million from the Asian Development Bank (ADB), a grant worth €15.4 million (€1 = Rp20,625) from the European Union (EU), and a grant of US$5.5 million from the Japan Fund for the Joint Crediting Mechanism trust fund.
Counterpart funding from the implementing agencies will cover the remainder of the project’s costs.
The Cabinet approved a proposal submitted by Sri Lankan President Anura Kumara Dissanayake in his capacity as Minister of Finance, Planning, and Economic Development to sign the agreements. The government had previously authorised negotiations with the ADB and other financing partners.
Under the Rooftop Solar Aggregation and Virtual Net Metering Project, the state-owned companies Electricity Distribution Lanka (Private) Limited and Lanka Electricity Company (Private) Limited will build a utility-based model to aggregate electricity generated by large-scale rooftop solar systems and allocate electricity credits to eligible consumers.
The scheme is intended to enable micro, small, and medium enterprises (MSMEs), as well as community organisations, to benefit from solar power without having to install solar panels on their own premises. Eligible users facing financial or space constraints will receive allocations through a social compensation mechanism designed to reduce electricity costs.
The project is expected to support around 25 megawatt-peak (MWp) of rooftop solar capacity. It will also finance digital upgrades to the distribution networks of the two utility companies and enhance their ability to accommodate additional distributed renewable energy.
“This project will help Sri Lanka expand access to affordable renewable energy while strengthening grid readiness for a more resilient and inclusive power sector,” said ADB Country Director for Sri Lanka, Shannon Cowlin. “It will support small businesses, advance the modernisation and digitalisation of the power grid, and create new opportunities for women and young people in the clean energy industry,” she continued.
Training facilities will also be established to develop green sector skills, strengthen women’s participation, and build technical capacity in advanced low-carbon technologies.