A total of US$160M was approved by ADB for the Clean Energy and Access Improvement Project in Sri Lanka, part of which will add 200MW of additional hydro power capacity. The executing agency is the Ministry of Power and Energy.
The loans were US$135M with a 25-year term with a five-year grace period from its ordinary capital resources, and also US$25M with a 32-year term and eight year grace period from the bank’s Asian Development Fund (ADF).
ADB said the funds would be used to support energy efficiency improvements, develop renewable energy resources, and increase the number of rural grid connections.
The initiative is to help offset the major increase in thermal power in the island’s generation portfolio over 1986-2008, which saw its share jump from almost nothing to more than half of installed capacity.
Further difficulties for power development include the high debt level of the state-owned energy company the Ceylon Electricity Board (CEB).
Under the bank’s loan approval plan, the Sir Lankan Government is also to contribute the equivalent of approximately US$24M.
