Sri Lanka: Power Sector Development Program Loan 1929/1930 - 2010 | Asian Development Bank

Sri Lanka: Power Sector Development Program Loan 1929/1930 - 2010

Project Result / Case Study | 15 October 2012

The Power Sector Development Program aims to provide 80% of the Sri Lanka’s population with electricity by 2010.

Background

The poverty reduction framework of the Government of Sri Lanka notes the importance of rural electrification: "Without access to electricity, rural areas cannot host the industries and other off-farm income-generating activities that are essential to a pro-poor process of structural change."

Electrification has the potential to enhance the scope for productive off-farm income-generating opportunities enabling the poor to diversify income sources, reduce risks, and benefit from other development inputs important for poverty reduction, such as clean water, sanitation, health, and education. Electricity means longer business hours for the local stores, improved security with public lighting, and enhanced social interaction in the village.

In response to the government's electrification objectives, the goal of the Power Sector Development Program (cofinanced by the World Bank and ADB among others) is to provide 80% of the country’s population with electricity by 2010. ADB is supporting two main aspects.

First, the program loan will:

  • establish an independent regulatory and tariff-setting mechanism;
  • enhance sector efficiency by introducing competition and commercialization; and
  • encourage private sector participation in the sector by developing an enabling, transparent business environment.

Second, it will also address the drain on national resources arising from the financial deterioration of the state-owned utility, Ceylon Electricity Board (CEB).

Key Points

Development aims and impacts:

  • Rural electrification has the potential for whole communities to benefit from improved incomes, time savings, and overall improved living conditions (less airborne pollution, longer study times, and improved nighttime security in communities through public lighting).
  • Potential benefits for women can be even greater such as significant time savings and reduced work burden freeing up time to improve women’s quality of life by improving skills, relaxing with family, and generally reducing daily stress.
  • While basic rural electricity coverage has to be expanded through investment in transmission and distribution networks, it is important to "go beyond the meter" to ensure connectivity of poor households including households headed by females.

ADB processes and management tools:

  • Accompanying Japan Fund for Poverty Reduction (JFPR) grants (Power Fund for the Poor and Post-Tsunami Utility Connections for the Poor) ensured that the poor and marginalized—including households headed by females—could access electricity services.
  • Awareness programs and training sessions with the Ceylon Electricity Board and nongovernment organizations in the region were used to build the capacity of key institutions to ensure that the poor and marginalized can access connections and means to sustain connectivity despite low incomes.

For more information on this case study, read the ADB publication Gender Equality Results Case Studies: Sri Lanka.