Nov 24, Colombo: The Asian Development Bank (ADB) has agreed to loan US$ 150 million as a the first tranche for the project of implementation of Green Power Development and Energy Efficiency Improvement Investment in Sri Lanka, the Finance and Planning Ministry said in a media release.
The government says that the demand for electricity is increasing rapidly with emerging economic activities and it is required to install additional capacity of 2502 MW to the national grid by 2020 to increase the current national electrification ratio of 96% and to fulfill future demand.
The government has given priority to ensure energy security at lowest cost while diversifying energy sources and promoting power generation through cleaner and non-conventional renewable energy sources.
The government has therefore negotiated with the ADB to obtain US$ 300 million for the implementation of the Green Power Development and Energy Efficiency Improvement Investment Program with the aim of increasing access to clean and reliable power supply by enhancing clean power generation, system efficiency and reliability.
The total investment cost of this program is US$ 440 million. ADB has agreed to provide US$ 300 million of the total cost under Multi-tranche Financing Facility (MFF) and US$ 150 will be provided under first tranche.
The program will focus on the green power development portion of the government's energy sector investment program while encouraging and facilitating private sector investment in renewable power generation through improving transmission infrastructure. In addition, the program will support development of hydropower generation and power transmission infrastructure.
The proposed project under the first tranche of the program will include the construction of (i) the 30 MW, run-of-river hydropower plant at Morogolla, (ii) four new grid substations and associated facilities at Kerawalapitiya (220/33 kV), Kappalturai (220/132/33 kV) , Kalutara and Kesbewa (both 132/33 kV) and augmentation of Katunayake and old Anuradhapura 132/33 kV grid substations in Western, Eastern and North Central Provinces; (iii) 33 kV lines and gantries at around Vavunativu and Madampe in Eastern and North Western Provinces; and (iv) DSM pilot subprojects in Colombo under the physical investments. Further it is proposed to strengthen the capacity building and project management including preparation of future MFF investments and implementation supervision of capital investments of first tranche under the non-physical investments, the Ministry said.
The Ministry of Power and Energy will be the Executing Agency for the Project, and the implementing agency will be the Ceylon Electricity Board. The overall program is scheduled to be completed by 31st March 2020 while the completion date of the project to be implemented under first tranche is 30th September 2019.
Secretary to the Ministry of Finance and Planning Dr. P B Jayasundera and Country Director of ADB Sri Lanka Resident Mission Ms. Sri Widowati signed the two Loan Agreements to obtain US$ 150 million on 20th November 2014 at the Ministry of Finance and Planning.