Sri Lanka will Use $100 Million Indian Credit Line for Rooftop Solar

In the middle of the acute economic crisis and increasing losses to the state electricity distribution entity, the Sri Lankan government has decided to utilise the line of credit worth $100 million granted by India. In July, 2021, India had signed an agreement with Sri Lankan Government to extend a USD 100 million Line of Credit (LOC) to Sri Lanka for various solar energy projects to help the island country’s 70 percent power requirements to be fulfilled by renewable energy sources by 2030.

Sri Lanka’s Energy Minister Kanchana Wijesekara has said in a statement that $100 million credit line extended by India for rooftop solar shall be employed to solarize schools, universities, educational institutes, hospitals, government buildings and religious institutions.

The Sri Lanka government is facing widespread criticism and even protests due to high tariffs on electricity. Last August, the government increased the electricity rates by about 75 per cent after a gap of nine years in order to fill the loss gap of Ceylon Electricity Board (CEB), the state power entity.

The religious leaders of Sri Lanka had been protesting the rising electricity cost in the country. The Public Utility Commission of Sri Lanka then said that rates with concession will be offered to the religious institutions which make about 48,000 in numbers in Sri Lanka.

Energy Minister Wijesekara, however, held that the CEB Commission needs to inform CEB on how the electricity rates will be subsidised.

Sri Lanka recently declared international debt default because of FOREX crisis. It has a total foreign debt of $51 billion and $28 billion should be paid by 2027. Recently, the Indian Government offered an assistance of about $4 billion to help Sri Lanka battle its worst economic crisis.

Last year, Sri Lanka announced investing more rooftop solar energy installations in the country as it looks to achieve carbon-neutral electricity generation system by 2050.