Renewable Energy – ADB Backs Sri Lanka’s Clean Power Expansion With New Funding
Renewable Energy – The Asian Development Bank (ADB) has approved a financial package worth 57.4 million US dollars to support Sri Lanka’s efforts to expand access to affordable renewable energy while lowering greenhouse gas emissions. The initiative is expected to strengthen the country’s clean power infrastructure and make solar energy more accessible to a wider section of consumers through innovative distribution models.
Funding Package to Boost Renewable Energy Access
According to the ADB, the approved financing will help implement a rooftop solar aggregation and virtual net metering programme across Sri Lanka. This approach will allow eligible electricity users to receive the benefits of solar-generated power without the need to install solar panels on their own properties. The system is designed to make renewable energy available to consumers who face financial, technical, or space-related limitations.
The overall funding package consists of a 35 million US dollar concessional loan from the ADB, a 16.9 million US dollar grant provided by the European Union, and an additional 5.5 million US dollar grant from the Japan Fund for the Joint Crediting Mechanism. Together with contributions from the project’s implementing agencies, the total estimated investment will reach approximately 80.5 million US dollars.
Utility-Led Model to Modernise the Power Network
The Rooftop Solar Aggregation and Virtual Net Metering Project will be carried out through two state-owned electricity utilities. Under the proposed framework, electricity produced from large rooftop solar installations will be pooled and the generated energy credits will be distributed virtually among qualified consumers.
ADB officials believe this model will create a scalable solution for expanding renewable electricity while improving the efficiency of Sri Lanka’s existing power distribution network. The project also includes plans to modernise and digitalise electricity infrastructure, enabling the national grid to handle a greater share of decentralised renewable energy in the years ahead.
Support for Businesses and Community Organisations
The initiative is expected to provide meaningful financial relief for micro, small and medium-sized enterprises as well as community organisations. Many of these groups have been unable to install rooftop solar systems because of high upfront costs or limited rooftop space.
Through a dedicated social compensation mechanism, eligible beneficiaries will receive allocations from the shared solar generation system, helping them reduce electricity expenses without making major infrastructure investments. The programme is intended to broaden participation in the clean energy transition while ensuring that its benefits reach communities that might otherwise be left behind.
Strengthening Skills and Building a Greener Future
ADB Country Director for Sri Lanka Shannon Cowlin said the project would improve access to affordable renewable energy, enhance the readiness of the national electricity grid and contribute to building a stronger and more inclusive power sector.
In addition to supporting around 25 megawatt-peak of rooftop solar capacity, the project will invest in workforce development by establishing a specialised training facility focused on green skills. The programme also aims to encourage greater participation of women in the clean energy industry while strengthening technical expertise in advanced low-carbon technologies.
The bank said these combined efforts are expected to accelerate Sri Lanka’s transition towards a cleaner, more resilient and sustainable energy system while creating long-term economic and environmental benefits.