Sri Lanka is borrowing 30 million US dollars from the World Bank to strengthen the electricity grid to accommodate more renewable energy, the Finance Ministry said.

Renewable energy is intermittent and money has to be spent to maintain grid stability and reduce the risk of cascading failire, to accommodate electricity that flows in the opposite direction and also to bring renewable power from remote locations.

Sri Lanka’s grid capacity has “hindered the utilization renewable energy presenting significant technical challenges, therefore, the proposed project has been formulated to enhance the infrastructure facilities to facilitate the grid integration of renewably energy,” the External Resources Department of the Finance Ministry said.

The borrowing though the Secure, Affordable, and Sustainable Energy for Sri Lanka Project was to meet the Government’s power sector policy, of generating 70 percent of the country’s electricity from renewable sources by 2030.

The project will be complemented by a facility of the World Bank group to boost private sector investments.

It will help scale up renewable energy adoption, strengthening grid infrastructure to ensure secure and affordable power supply, mobilizing private sector participation, and enhancing institutional capacity to sustain long-term sector reforms, the statement said.

The 30 million dollars come from the International Development Association window of the World Bank.

The total project cost is 60 million dollars. The balance 30 million is to come from the World Bank as second phase. The funds will be on-lent to Ceylon Electricity Board.
The Financing Agreement was signed on December 03, 2025, by Treasury Secretary Harshana Suriyapperuma, and David N. Sislen, Division Director for Maldives, Nepal, and Sri Lanka of the World Bank Group.

Source- ECONOMYNEXT-Wednesday December 10, 2025