• Payment delays to renewable energy developers deepen amid cash flow crisis
• Fuel price surge, delayed tariff revision worsened financial strain: NSO
• 2nd emergency coal shipment commences unloading

The National System Operator (NSO) has formally requested financial assistance from the Government to settle an estimated Rs. 10 billion in outstanding payments owed to renewable energy developers.

The mounting arrears, which industry stakeholders say have accumulated since the beginning of the year, have intensified concerns within the renewable energy sector and highlighted broader financial strains affecting Sri Lanka’s electricity supply system.

Speaking to The Sunday Morning, NSO Chairman Dr. Pradeep Perera said that the institution had sought urgent Government intervention to stabilise the situation and resume delayed payments to energy producers.

“We requested the Government to provide assistance, and we hope corrective action will be taken soon. If that happens, we expect to begin settling these payments within the next couple of weeks,” Dr. Perera said. 

He said that the NSO required a sustainable financial mechanism to maintain operational stability and ensure uninterrupted payments moving forward.

“We require some form of Government support, either through a subsidy mechanism or through tariff adjustments, in order to reach a sustainable break-even position,” he explained.

According to Dr. Perera, the sector’s financial difficulties worsened significantly following the escalation of conflict in the Middle East earlier this year, which triggered a sharp increase in global fuel prices, particularly for diesel and furnace oil used in thermal power generation.

He explained that although electricity tariffs were expected to be reviewed quarterly, the anticipated tariff revision for the first quarter had not materialised, leaving the utility unable to recover rising operational costs.

“Under normal circumstances, tariff adjustments are expected every quarter. However, the adjustment for the first quarter did not take place. As fuel prices increased, our revenues did not increase proportionately, which created a serious cash deficit. As a result, we had to prioritise certain payments, leading to delays during March and April,” Dr. Perera noted.

The NSO Chairman further stated that a portion of the payment arrears predated the operational takeover of the National System Operator on 10 March and originated when the Ceylon Electricity Board (CEB) was still responsible for settling payments to renewable energy developers.

“When the NSO assumed operational responsibility on 10 March, there were already outstanding arrears from the CEB side. My understanding is that there had already been delays of nearly two months at that stage, covering payments for January and February,” he said.

When questioned regarding the total value of the arrears, Dr. Perera acknowledged estimates circulating within the renewable energy industry.

“The developers have indicated that the outstanding amount is now around Rs. 10 billion, but I cannot confirm this personally,” he stated.

Meanwhile, authorities are continuing efforts to secure sufficient fuel supplies for thermal power generation as part of wider measures to stabilise the national grid.

Ministry of Energy Secretary G.M.R.D. Aponsu provided an update on the emergency coal procurement process initiated to address supply shortages and ensure uninterrupted electricity generation.

“The first shipment under the urgent spot procurement has already been unloaded, and unloading operations for the second shipment, which arrived on Thursday (7), have now commenced,” Aponsu said.

He added that the quality of the coal consignments had been verified through standard inspection procedures carried out at the port.

“Quality checks have been completed and everything is in order,” he said.

The Ministry of Energy had previously initiated five emergency spot procurements to secure coal supplies ahead of anticipated demand pressures.

Regarding the remaining shipments, Aponsu said that delivery schedules were being closely monitored in accordance with procurement regulations, while minor delays remained possible under standard shipping conditions.

“Two shipments have already arrived, while the remaining consignments are also on the way. Delivery schedules are monitored by the procurement authorities, and if delays occur, the relevant penalties will apply under procurement regulations. However, minor delays of about a day can sometimes occur under normal shipping conditions,” he claimed.