Colombo, Dec 19 (IANS): The Asian Development Bank (ADB) signed an agreement with the Ceylon Electricity Board (CEB) on Thursday to provide $150 million for transmission projects in Sri Lanka, a statement from CEB said.
The CEB said ADB approved the loan package in November 2024 after rigorous due diligence by ADB on the technical, economic and social merits of its upcoming investment proposals.
Through these funds, several essential projects in the long-term transmission plan will be implemented over 2025-2027. It will improve the overall reliability and stability of the grid, the CEB said.
Transmission assets built through this loan will enable the integration of planned large-scale renewable energy developments into the national grid. The financing will support the construction of six new grid substations, the construction of 87 km of 132 kV transmission lines, the construction of 45 km of 220 kV transmission lines and the augmentation of two existing grid substations, according to the CEB, Xinhua news agency reported.
The CEB and its distribution subsidiary Lanka Electricity Company (LECO) serve over 7.5 million electricity customers through its transmission network comprising 3,400 km of high voltage lines and 90 grid substations, according to the CEB.
Last week, the Sri Lankan cabinet had approved a proposal to sign two agreements with the ADB for strengthening its power system and integration of renewable energy projects, according to a statement from the government's information department.
Country's President Anura Kumara Dissanayake had submitted the proposal in his capacity as the Minister of Finance, Planning and Economic Development.
The ADB agreed to offer $200 million as two separate loans -- $150 million and $50 million -- to Ceylon Electricity Board and Lanka Electricity (Pvt) Ltd., respectively, under two agreements on treasury guarantee, according to the department.
In September, the Lankan government had also approved a proposal to select investors through a competitive bidding process to develop floating solar power plants in three reservoirs.
Three main reservoirs - Randenigala, Moragahakanda and Kalawewa - were identified by the Sri Lanka Mahaweli authority to develop such projects as the government is giving priority to developing floating solar power projects on reservoirs to increase renewable power generation.
The Ceylon electricity board has been assigned the selection of investors under the competitive procurement procedure according to the Cabinet proposal.