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Sunday December 10th, 2023

Sri Lanka buys 96MW for Southern grid power crisis from ACE

ECONOMYNEXT – Sri Lanka’s Ceylon Electricity Board has been given the nod by the regulator to buy 96 MegaWatts of emergency power from ACE Power Embilipitiya for six months to augment the Southern grid after hydro stations were run down.

The Southern grid which is on a 132kV does not have enough power when key reservoirs like Samanalawa are run down.

The CEB requested daily one hour power cuts to conserve hydro storage to provide water to Colombo and keep supply to the Southern grid when a coal plant broke down but permission was denied amid political confusion.


Sri Lanka could face long power cuts, water shortages, Southern grid failures

The warnings by engineers were ignored as is usually the case in Sri Lanka, observers say.

CEB requested small daily power cuts early in 2022 because the 220kV grid to which most of the larger plants are connected did not have sufficient interconnection with the 132kV grid, there could be water shortages in Colombo due to the Kelani Cascade being run down and problems for agriculture.

An additional interconnection line was being built as demand grew in the Southern grid but the Covid pandemic had delayed it.

Internal suggestions to repurchase ACE Embilipitiya, which were lying idle possibly at a lower cost before the power crisis that was predicted due to the cancellation of the coal plant in Trincomallee and the delay in a dual fuel plant had also not been proceeded with.

“There is usually political and public opposition to this type of purchase, so no one wants to take a decision. They will be branded the mafia,” an industry source said. “There was also a leadership crisis in the CEB so there was no one bold enough to take the decision.

“The CEB is hampered because it is almost impossible to make the public understand complex technical issues.

“That is also why the long-term generation plan is blocked by various parties and the country ends up in crises. Unfortunately it is very easy for interested parties to mislead the public due to the complexity of the issues.”

As the crises worsened and the predicted long power cuts took place (power cuts were predicted even if fuel was available for all power plants) the cabinet had given the go ahead to buy ACE Embilipitiya.

The “cabinet has declared an “emergency situation’ in the energy sector as required under section 43(4) (c ) (ii) of the Sri Lanka Electricity Act in keeping with the directive of HE the President have made on 02nd March 2022,” the Public Utilities Commission of Sri Lanka said.

“With that CEB has requested the approval of 93 MW of capacity under short term power purchase agreement from ACE Power (Embilipitiya) power plant for 6 months in order to reduce the long hours of power interruptions immediately.” (Colombo/Mar13/2022)

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ADB USD200mn loan for Sri Lanka economic stabilization efforts

ECONOMYNEXT – The Asian Development Bank (ADB) has approved a US 200 million dollar concessional loan to Sri Lanka to help stabilize the country’s finance sector.

The Financial Sector Stability and Reforms Program comprises two subprograms of IS 200 million dollars each, according to a statement by the ADB.

“The program’s overarching development objective is fully aligned with the country’s strategy of maintaining finance sector stability, while ensuring that banks are well-positioned for eventual recovery,” ADB Country Director for Sri Lanka Takafumi Kadono was quoted as saying in the statement.

“The expected development outcome is a stable financial system providing access to affordable finance for businesses in various sectors of the economy.”

The ADB statement continues:

“Subprogram 1 targets short-term stabilization and crisis management measures that were implemented in 2023, while subprogram 2 is planned to be implemented in 2024 and focuses on structural reforms and long-term actions to restore growth in the banking sector.

The program will help strengthen the stability and governance of the country’s banking sector; improve the banking sector’s asset quality; and deepen sustainable and inclusive finance, particularly for women-led micro, small, and medium-sized enterprises.

According to the International Monetary Fund’s (IMF) latest review, Sri Lanka’s economy is showing tentative signs of stabilization, although a full economic recovery is not yet assured.

The program is a follow-on assistance from ADB’s crisis response under the special policy-based loan that was approved for Sri Lanka in May 2023.

It is aligned with the fourth pillar of the IMF’s Extended Fund Facility provided to Sri Lanka to help the country regain financial stability.

It is also in line with the government’s reform agenda, including strengthening the operational independence of the Central Bank of Sri Lanka (CBSL) and its designation as the country’s macroprudential authority.

In designing this subprogram 1 loan, ADB has maintained close coordination and collaboration with the IMF to design targeted regulatory reforms for the banking sector—including the asset quality review—and with the World Bank on strengthening the deposit insurance scheme.

“The loan is accompanied by a $1 million grant from ADB’s Technical Assistance Special Fund to provide advisory, knowledge, and institutional capacity building for Sri Lanka’s Ministry of Finance and CBSL.”

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Sri Lank in blackout as power grid hit by cascading failure

ECONOMYNEXT – Sri Lanka suffered a blackout as Saturday evening as the state-run Ceylon Electricity Board grid was hit by a cascading power failure.

The cascading failure is believed to have been triggered by the failure of the Kothmale-Biyagama transmission line.

“The Ceylon Electricity Board wishes to inform our customers that due to the failure of Kotmale – Biyagama main transmission line, an island wide power failure has occurred,” CEB Spokesman Noel Priyantha said.

“Step by step restorations are underway and it may take few hours to completely restore the power supply.”

With hydro plants running flat out, a outage of the line tends to create a big imbalance in the demand and supply, leading to tripping of more lines and generators.

Lines can trip due to lightening strikes, or equipment failures.

Sri Lanka last suffered a cascading failure in December 2021, due to the failure of the same transmission line.

RelatedSri Lanka power blackout as grid hit by cascading failure

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Sri Lanka to host regional Food and Agriculture Organization conference

ECONOMYNEXT – Sri Lanka will host the 37th session of the Asia Pacific Regional Conference (APRC) of the United Nations Food and Agriculture Organization (FAO), from February 19-22, 2024 in Colombo.

The Conference will bring together agriculture ministers and officials from 46 countries across the region to discuss challenges in food and agriculture.

“The 37th APRC will provide a vital platform for regional collaboration, benefitting the agricultural landscape, fisheries sector and environment of Sri Lanka,” Minister Mahinda Amaraweera said at a press briefing on Friday (8) to announce the conference.

FAO has had an active presence in Sri Lanka for over 40 years. “FAO has supported the country in the implementation of Good Agricultural Practices (GAP), and the development of the fisheries sector for growth and climate resilience,” Vimlendra Sharan, FAO Representative for Sri Lanka and the Maldives said.

“The APRC conference will be an opportunity to highlight the innovative approaches introduced in partnership with the government.”

By hosting APRC, Sri Lanka hopes to demonstrate the country’s dedication to the growth of sustainable agriculture, and showcase its commitment to sustainable agricultural development.

The APRC agenda will include a forum on agritourism, especially requested by the Sri Lankan government.

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