ECONOMYNEXT – The World Bank said it had approved a 150 million dollar program for Sri Lanka that will help finance 1000 MegaWatts of solar and wind energy and also strengthen the grid to avoid blackouts.
The 150 dollar program includes 40 million dollars in guarantees which will reduce risks of private investors.
“The program also supports the upgrades to Sri Lanka’s electricity grid, enabling it to better handle renewable energy and reduce power outages,” the World Bank said.
“This modernization will help stabilize electricity prices and improve energy access for households and businesses across the country.”
Sri Lanka suffered a blackout earlier in 2025, by having a too large share of solar and too small share of generators with ‘inertia’ that can withstand shocks and maintain voltage stability.
The Secure, Affordable, and Sustainable Energy for Sri Lanka program will support the country reduce its reliance on expensive fossil fuel imports and accelerate its shift toward solar and wind, the World Bank said.
In Sri Lanka due to lack of competitive tendering, renewable power is also costs above some other countries, analysts have said.
In Sri Lanka the cheapest source of power comes from renewable large hydro plants owned by the Ceylon Electricity Board with fully depreciated plants dating back from the time it ran an almost 100 percent renewable system.
At the moment hydro electricity is generated at costs between 1 rupee and 12.69 rupees, Power and Energy Minister Kumara Jayakody told parliament last week
Solar power was between 27.26 rupees and 35.50 rupees, and coal was 20.80 rupees a unit, Minister Jayakody said.
Liquid fuel is more expensive with diesel costing the most.
The World Bank said the new package will support new solar and wind energy projects that will add 1 gigawatt of clean electricity to the grid – bringing Sri Lanka closer to its goal of generating 70 percent of its electricity from renewable sources by 2030.
It will help more than 800 million dollars in private investment. (Colombo/June21/2025)
