ECONOMYNEXT - The Asian Development Bank will shift its lending to expressways, rail, higher education and renewable power, with Sri Lanka reaching upper middle income levels, an official said.
The ADB had been funding basic education, roads and energy over the last decades.
The lender will focus more on rail and expressways in transport, it is next lending strategy running up to 2021, ADB's senior country economist Tadateru Hayashi Senior Country Economist said.
In education its lending will shift to higher education and promoting innovation, he said.
ADB will also lend to pipe-borne water supply and waste disposal.
ADB is expecting to lend 505 million dollars to Sri Lanka in 2016, 739 million dollar in 2017 and 2018 in 1,053 in projects already in the pipeline.
With about 98 percent of household now having electricity and 100 percent electrification expected in 2017, ADB will shift resources to promoting renewable energy like wind power, Hayashi said.
Some forms of renewable energy however is much more expensive than coal or large hydros and there has been concern that high prices paid for the renewable will make Sri Lanka's power costs rise making the island less competitive and also harming poverty reduction, critics say.
Sri Lanka's non-conventional renewable plants are small and cannot be centrally dispatched. The power utility has to keep alternate idle capacity to supply power when the plants stop working.
Renewable energy firms have formed a powerful lobby group worldwide taking billions of dollars through preferential feed-in tariffs and taxes collected from the people as subsidies in 'negative taxation' unlike petroleum firms which are net tax payers.
Critics say expansion of such practices could harm developing countries which need health and education spending. (Colombo/Feb19/2016)