The Asian Development Bank (ADB) and the Government of Sri Lanka signed a loan agreement for US$100 million for subprogram 1 of a policy-based loan (PBL) to support and facilitate reforms aimed at enhancing the financial sustainability of the power sector in Sri Lanka.
This loan is part of a broader programmatic approach PBL, consisting of three subprograms totaling US$300 million, dedicated to transforming the power sector.
The program will help the government undertake institutional reforms in the electricity sector by establishing independent companies with defined functions and support strengthening their corporate governance and financial sustainability.
It will support regulatory reforms with the implementation of the new national tariff policy that will improve financial sustainability of the sector through cost-reflective tariffs.
ADB will provide an additional $1 million technical assistance grant from its Technical Assistance Special Fund to support program implementation, capacity building of electricity companies, the development of their business plans and overall power system development plans.
Mahinda Siriwardana, Secretary to the Treasury signed on behalf of the Government of Sri Lanka and Takafumi Kadono, Country Director, ADB, Sri Lanka Resident Mission signed on behalf of ADB.
