COLOMBO: Sri Lanka's cabinet approved loan and grant agreements for a US$80.5mil (RM328mil) project on Tuesday, aiming at expanding rooftop solar generation, introducing virtual net metering and modernising electricity distribution networks.
The financing package includes a 35 million U.S. dollar concessional loan from the Asian Development Bank (ADB), a 15.4 million euro (16.9 million U.S. dollar) grant from the European Union, and a 5.5 million U.S. dollar grant from the Japan Fund for the Joint Crediting Mechanism. Counterpart funding from implementing agencies will cover the balance of the project cost.
The cabinet approved a proposal submitted by President Anura Kumara Dissanayake in his capacity as Minister of Finance, Planning and Economic Development to enter into the agreements. The government had previously authorized negotiations with the ADB and other financing partners.
Under the Rooftop Solar Aggregation and Virtual Net Metering Project, state-owned Electricity Distribution Lanka (Private) Limited and Lanka Electricity Company (Private) Limited will establish a utility-led model that pools electricity generated by large rooftop solar systems and allocates credits to eligible consumers.
The arrangement is intended to allow micro, small and medium enterprises and community organizations to benefit from solar power without installing panels at their own premises. Eligible users facing financial or space constraints will receive allocations through a social compensation mechanism designed to reduce electricity costs.
The project is expected to support about 25 megawatt-peak of rooftop solar capacity. It will also finance digital upgrades to the two utilities' distribution networks and improve their ability to accommodate additional distributed renewable energy.
"This project will help Sri Lanka widen access to affordable renewable energy while strengthening grid readiness for a more resilient and inclusive power sector," said ADB Country Director for Sri Lanka Shannon Cowlin. "It will support small businesses, advance grid modernization and digitalization, and create new opportunities for women and young people in the clean energy industry."
A training facility will also be established to develop green-sector skills, strengthen women's participation and build technical capacity in advanced low-carbon technologies.- Xinhua
