• 1: Govt. plans to restructure power sector to achieve cost savings
• 2: Focus on renewable energy and reducing reliance on thermal power

Sri Lanka’s new government expects to restructure the power sector to reduce the electricity rates by 30% in the next one-year period, Senior Consultant in Economic Affairs and Finance to President Prof. Anil Fernando said.

Speaking to TV Derana yesterday (5), Fernando said that the government has not officially announced that it won’t proceed with the state-owned enterprises (SOE) restructuring.

“We 100% agree with the restructuring (of SOEs), we are doing it and we will clearly state how we are doing it,” he said.

He said that the restructuring should be done to reduce the electricity rates by 30% which would take a maximum period of one year.

He added that society thinks restructuring an SOE means selling it to the private sector.

Fernando said that the current government sees it strategically and politically important for the state to keep the ownership of transmission and distribution in the power sector reforms while keeping the private sector involved in power generation.

He said that as the President has already said the power sector should move away from the reliability of thermal power due to its high cost which is in the range of Rs. 70-200 per unit.

“The long-term plan is to shift towards renewable energy gradually. With that we can reduce the average cost from 12 cents to 7-8 cents in US dollar terms,” Fernando said.

In June 2024, the Ceylon Electricity Board (CEB), the Electricity Act, No. 36 of 2024 was enacted with the objectives of creating greater operational and financial autonomy for the generation, transmission and distribution while allowing the private sector participation in the three stages.

According to the Finance Ministry, CEB recorded a net profit before tax of Rs. 119.2 billion in the first six months of 2024, compared to a net loss of Rs. 13.7 billion in the same period of 2023.