The World Bank Group has approved a $150 million program aimed at supporting Sri Lanka's transition to clean energy. The initiative, named Secure, Affordable, and Sustainable Energy for Sri Lanka, seeks to reduce the country's dependency on costly fossil fuel imports by focusing on solar and wind energy.
"This program will help deliver clean, affordable electricity to families and businesses across Sri Lanka," stated David Sislen, World Bank Division Director for the Maldives, Nepal, and Sri Lanka. He emphasized collaboration with both governmental and private sectors to realize this vision.
The initiative is set to introduce new solar and wind projects that will add 1 gigawatt of renewable energy to the national grid. This development aligns with Sri Lanka's objective of sourcing 70 percent of its electricity from renewables by 2030. Additionally, it is expected to attract over $800 million in private investments.
A key component involves $40 million in World Bank Group guarantees in its initial phase. These guarantees aim to mitigate risks for investors by securing payment obligations from the Ceylon Electricity Board (CEB), thereby enhancing investor confidence and facilitating financing under better terms. The International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) will provide further support through direct investments and political risk insurance.
“Sri Lanka’s energy transition is an opportunity to expand clean energy, improve energy access, and build long-term resilience,” commented Imad N Fakhoury, IFC's Regional Director for South Asia. He highlighted the necessity of collaboration between public and private sectors.
MIGA's role includes offering political risk insurance to diminish uncertainties faced by international investors. "Investors need confidence to take bold steps in new markets," said Muhamet Fall, Director of Operation with MIGA.
Moreover, the program aims at modernizing Sri Lanka’s electricity grid to accommodate renewable sources more efficiently while reducing power outages. It also plans technical assistance for CEB in enhancing planning and operations as well as supporting government reforms towards better competitiveness and regulatory oversight.
Utilizing a comprehensive range of tools—financing, knowledge sharing, and partnerships—the World Bank Group aims to bolster Sri Lanka's energy access while laying groundwork for sustainable economic growth.