• Lanka Coal Company recovers Rs 17b through guarantees and penalties
• NSO and EGL incur additional costs to maintain power generation
• Govt says burden will not be passed on to electricity consumers

The Electricity Generation Lanka (EGL) Private Limited and the National System Operator (NSO) Private Limited have collectively incurred an estimated loss of Rs 15.765 billion due to substandard coal supplied during 2025 and 2026, while the Lanka Coal Company Private Limited has recovered Rs 16.989 billion from the supplier through performance guarantees and penalties, Energy Minister Anura Karunathilaka said.

Making a Ministerial statement in Parliament yesterday (8), he said that issues relating to coal quality during the 2025-2026 period had affected both the EGL and the NSO, resulting in additional costs to maintain electricity generation and address shortfalls in power supply.

According to the Minister, the NSO incurred additional expenditure to procure electricity that could not be generated due to the poor quality of coal supplied. The EGL, meanwhile, had to spend on obtaining additional coal, carrying out essential maintenance and meeting increased handling costs.

“The NSO has incurred an additional cost of Rs 8.572 billion. The EGL has incurred Rs 7.192 billion to obtain additional coal, carry out essential maintenance and meet additional handling costs. The combined loss calculated so far therefore stands at Rs 15.765 billion,” Karunathilaka said.

He said that the Government had decided that the financial burden arising from the substandard coal issue would not be passed on to the public.

“As the President and the Government, we said that we would not pass this burden on to the people under any circumstances,” he said.

Karunathilaka added that the Lanka Coal Company had retained Rs 16.989 billion from the coal supplier through performance guarantees and penalties imposed in relation to the incidents.

The issue of coal quality has remained contentious in Sri Lanka’s power sector, particularly in relation to coal supplied to the Lakvijaya Power Plant in Norochcholai last year. The controversy led to the resignation of then Energy Minister Kumara Jayakody and Energy Ministry Secretary Prof. Udayanga Hemapala.

A Presidential Commission of Inquiry was subsequently appointed to investigate past coal procurement and supply processes and the circumstances surrounding the allegations.