Sri Lanka : Promoting Increased Renewable Energy Deployment, Energy Efficiency, and Power System Resilience

Energy / Electricity transmission and distribution - Energy sector development and institutional reform - Renewable energy generation - solar

The transaction technical assistance (TA) facility will support the (i) deployment of renewable energy, (ii) interventions to improve energy efficiency and renewable energy penetration, (iii) identification of climate resilient investments, and (iv) increase in project readiness of pipeline projects and support its implementation. The TA will also provide support innovation in project design, project sustainability and transfer capacity through specific training and skills-building activities for ensuing projects and implementation support for ongoing projects as required. Initially, the TA facility will support:

(i)Climate Resilient and Sustainable Energy Transition Project,

(ii)Additional financing for Rooftop Solar Generation Project, and

(iii)Power System Reliability Strengthening Project.

Sri Lanka's energy sector performance has achieved a national electrification ratio of 99.6% (2018), up from 29% in 1990. However, the sector continues to struggle in meeting the growing demand due to high electricity generation cost emanating from increasing share of oil-fired thermal power in generation mix and inadequate level of power system reliability. The increasing share of oil-fired thermal generation poses a serious threat to the country's energy security and the environment. There is an urgent need to develop other clean energy sources in addition to hydropower, undertake loss reduction efforts, and improve the power system reliability.

The proposed TA will help the executing and implementing agencies to meet government and ADB financing requirements by supporting project preparation, improving project readiness, building capacity for implementation, and overall portfolio performance. This proposed TA will complement government agencies and build upon their strengths to develop and implement energy sector infrastructure projects in emerging areas. This TA supports the priorities of ADB Strategy 2030, namely: (i) tackling climate change; building climate and disaster resilience and enhancing environmental sustainability; (ii) accelerating progress in gender equality by supporting activities and trainings to facilitate gender sensitive workplace practices and project components in project design; and (iii) strengthening governance and institutional capacity. This TA is listed in the current Sri Lanka country operations business plan