The Asian Infrastructure Investment Bank (AIIB) and the Government of Sri Lanka have signed a loan agreement for the Kerawalapitiya–Port L Second Transmission Line Project, under which the AIIB will provide $ 52 million in sovereign-backed financing to help Sri Lanka unlock its renewable energy potential and advance sustainable development.

The agreement was signed by the Secretary to the Treasury/Ministry of Finance, Planning and Economic Development Dr. Harshana Suriyapperuma and the AIIB Director General Public Sector Clients Department (Region One) Rajat Misra, during a high-level visit by the latter to the country. 

The project involves the design, supply, construction, testing, and commissioning of a 220 kilovolt single-circuit underground cable system linking the Kerawalapitiya Switching Station to the Colombo Port L Grid Substation. As the second underground cable on this route, it will complement the first line commissioned in 2019, which will soon be insufficient to meet the projected electricity demand in the Greater Colombo area. 

The new transmission line is critical for ensuring an uninterrupted power supply, maintaining grid stability, and enabling the evacuation of renewable energy from the Northern and Eastern regions towards major load centres in Colombo. Once operational, the project is expected to benefit local communities, urban services, and businesses in the Greater Colombo development area by providing a stable and reliable electricity supply. It will also directly support the growing power needs of the upcoming special economic zone, while indirectly reducing the risk of major blackouts – delivering considerable economic and social benefits.

So far, the AIIB has supported five transformative projects in the country, with a total financing of $ 534 million across the energy, transport, and urban sectors – driving sustainable growth and development.