ADB Allocates $100 Million for Power Sector Reform

 The Asian Development Bank (ADB) has decided to provide a policy-based loan of US$100 million to support the program implemented for the reform and modernization of Sri Lanka's power sector.

The primary objective of this financial facility is to accelerate the implementation of the second phase of the Asian Development Bank's energy sector reform package, with a special focus on the restructuring of the Ceylon Electricity Board (CEB).

This restructuring will take place in accordance with the 2024 Electricity Act and its 2025 amendment, under which the Ceylon Electricity Board (CEB) is to be unbundled and established as several independent successor companies responsible for electricity generation, transmission, system operations, and distribution.

This program will support maintaining a cost-reflective electricity tariff methodology to ensure the financial sustainability of the entire power sector, and implementing a comprehensive debt restructuring plan for the Electricity Board.

The Asian Development Bank states that the objective of these measures is to support the transparent distribution of existing debt among the newly established successor companies, as well as to enhance their financial viability and creditworthiness, allowing them to operate on a more stable footing.

In addition to this loan, the Asian Development Bank has also taken steps to provide a technical assistance grant of US$2.5 million. This grant is allocated to provide necessary support for program implementation, capacity building for the new companies, and assisting in the preparation of their business development plans.