ADB Grants $50 Million Loan for Developing Solar Rooftop Projects in Sri Lanka
The Ministry of Finance in Sri Lanka has announced that the country has secured a $50 million loan facility from the Asian Development Bank. As a part of the agreement, the bank will assist in the development of Solar Rooftop projects in the country.
The agreement for the loan has been secured to support the government’s “Battle for Solar Power” Programme, a loan scheme for households and businesses willing to install rooftop PV under net metering or net accounting mechanisms. The government is planning to install 200 MW of solar capacity by 2020 and at least 1000 MW by 2025.
The loan scheme is intended to help homeowners and enterprises install rooftop PV systems under net metering and net accounting mechanisms. “It is expected to add 50 MW to the national grid under this project,” the ministry said in a statement.
The Department of Development Finance under the Ministry of Finance, which is the implementing agency of the project, will coordinate with the selected banks and financial institutions to provide credit facilities to the customers to purchase rooftop solar panels from reliable suppliers who have registered under the Sustainable Energy Authority. “The households and the entrepreneurs will be provided maximum credit facilities up to 7. 5 million rupees (approximately $45,000) on the lending rate of 8 percent per annum,” the ministry confirmed in its statement.
“Sri Lanka’s energy sector has made tremendous progress over the last two and a half decades in bringing electricity to almost everyone in the country,” said Mukhtor Khamudkhanov, an ADB Principal Energy Specialist. “But there is a need to diversify the country’s energy mix toward more renewable and sustainable sources.”
ADB’s Rooftop Solar Power Generation Project will boost access to clean and reliable power in Sri Lanka. Total cost of the project is $59.8 million, to which the private sector will provide a $9.8 million equity contribution. The project’s expected completion date is by the fourth quarter of 2021.
Sri Lanka, thanks to its dependence on imported fossil fuels, be it Coal or Diesel, has relatively high priced power. That has ensured 100% electricity availability, and low distribution losses, but a serious challenge to growing power availability at a competitive cost and without affecting its fragile environment further. The Island nation has pledged to become 100% renewable energy driven by 2050, a hope that sits lightly on its current dependence on fossil fuel power for close to 65% of its requirements. The rest is met through Hydro and other renewables like wind, solar and more.
