Energy

Sri Lanka could lose billions through unsolicited New Fortress Energy deal: CEBEU

Thursday September 23, 2021 6:32 am

ECONOMYNEXT – Sri Lanka stands to lose hundreds of millions of dollars through a back-door liquefied natural gas (LNG) deal with a US firm which could be worth up to 6.0 billion US dollars but is coming in as the sale of share of a power plant, engineers of the state power utility have warned.

Energy security would also be undermined as the national grid would be dependent on a single company for the supply of LNG to the entire country and will also block state-run Ceylon Electricity Board from using cheapest energy source based on market prices, the CEB Engineers Union has said.

It is not clear how the unsolicited deal was suddenly struck without open tender for either the sale of a 40 percent Treasury stake in a power plant, LNG procurement for at least five years, or to operate floating liquefied natural gas terminal which is expected to charge fees from the state-run Ceylon Electricity Board.

US-based New Fortress Energy has announced it had struck a deal to supply state-run Ceylon Electricity Board to supply 1.2 million gallons of liquefied natural gas a day through a 310 MW combined cycle power plant and another 700 MW of plants to be built in Kerawalapitiya.

“As part of the transaction, New Fortress will have gas supply rights to the Kerawalapitya Power Complex, where 310 MW of power is operational today and an additional 700 MW scheduled to be built, of which 350 MW is scheduled to be operational by 2023,” the firm said.

“New Fortress will initially provide the equivalent of an estimated 1.2 million gallons of LNG (~35,000 MMBtu) per day to the GOSL, with the expectation of significant growth as new power plants become operational.”

The deal is bundled with a 250 million dollar sale of a 40 percent stake in the existing combined cycle plant held by the Finance Ministry, engineers of the Ceylon Electricity Board Engineers Union said.

The latest deal appeared to be an agreement for a term sheet for a final contract, the Union said.

Largest Ever Deal in History?

The complex deal involving committed energy purchase, a terminal and power plant could turn out to be the largest ever contract Sri Lanka had ever struck with a private company, the union said.

The deal for 5 years could be renewed for a further 10 years.

“The actual deal is in the fuel supply contract which can go up to 6,000 million US dollars and commit the CEB to unwanted LNG which may force renewable plants to be shut or pay the US company for unused gas,” CEBEU President Saumya Manawadu told reporters.

The commitment to pay the New Fortress Energy (NFE) for unused LNG comes through a ‘take-or-pay’ (TOP) commitment where the CEB is forced to operate the power plants 70 percent of the time (plant factor) or pay compensation to the company, the union said.

The deal committed Sri Lanka to “very high Take or Pay (TOP) gas volumes than the actual minimum requirement of the country with strict conditions that NFE should be paid irrespective of whether the contracted volumes are consumed or not,” the group said in statement.

A term sheet agreed with the government shows a price formula with a mark-up where the New Fortress Energy will make profits, union said.

New Fortress Energy is expected to also build a floating LNG terminal and charge fees on top of the gas mark-up for the terminal, while committing the country to purchase high volumes of LNG, the union said.

Terminal Deal

The firm had said it will charge 1.45 dollars per one million British thermal units (MMBTU) of LNG but a minimum commitment or capacity charge could push up it up to 5.50 dollars if the committed volumes are not used, the union said, in addition to compensation paid for unused gas.

The Ceylon Electricity Board operates a system where expensive thermal plants are shut when renewable energy, such as hydro output, goes up.

Under the New Fortress deal for “CEB should pay a minimum of 253 million dollars for FSRU separately as the capacity charge in addition to LNG payment,” the union said.

The terminal deal came after the CEB floated a tender to for a build operate own terminal.

CEBEUs Manawadu said the CEB worked with Asian Development Bank experts to formulate the floating terminal requirements and tender.

A related company to NFE had taken the bidding documents and the deal was transacted while the tender was ongoing, undermining the tender.

Serious bidders would be discouraged due to the unsolicited deal, he said.

He said President Gotabaya Rajapaksa was supportive of the tender going through and it was opened and several firms had bid for it.

Under the original plan a private investor would supply the floating terminal and operate it for competitive fee, a pipeline had been tendered by the state-run Ceylon Petroleum Corporation, which it would own at the end of the contract and LNG would be purchased separately.

A part of the LNG would be under long -term contract and the rest topped up through spot market.

The company that will run floating terminal under the CEB’s competitive tender has to pay Sri Lanka’s 24 percent corporate income tax, while the New Fortress is being promised tax free status the union said.

Manawadu said if the NFE deal went though the chance of another competitive floating unit being built was permanently terminated. The CEB was committed to a capacity charge under the unsolicited deal.

Powerful Mess

Once committed to a take-or-pay deal the CEB will lose its independence to operate the cheapest source of power under its least cost operating guide, he said.

CEB now operates or dispatches plants on a merit order based on generating cost while trying to operate cheaper renewable plants as much as possible.

The merit order of thermal plants may change depending on the fuel price.

“When we have committed to a take-or-pay contract we have to buy the LNG and allow hydro plants to spill or pay the cost of the unused LNG,” Manawadu said.

There was also a threat to energy security as the US firm would be the sole supplier of LNG which will make the bulk of the country’s energy through not only the 1,100 MW of Kerawalapitiya plants but the CEB’s own fuel oil plants which were expected to be converted to LNG after the competitive terminal was built he said.

For comparison Sri Lanka 900 Megawatt coal plant complex now produces about a third of the energy requirement.

The Union resisted take-or-pay deals of up to 20 years or more which came as ‘free’ floating terminal units under the last administration, promoted by different coalition partners, he said.

Meanwhile as the Federal Reserves printed money driving the so-called Powell Bubble, weakening the US dollar LNG prices have zoomed.

The Japan Korea Marker (JKM) for LNG has surged.

Coal prices have also been going up but LNG has spiked unusually. (Colombo/Sept24/2021)

Markets

Sri Lanka stocks close up, ASPI gains 0.41-pct

Friday October 9, 2026 4:06 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed higher on Friday, CSE data showed, with the benchmark All Share Price Index moving up 0.41 percent.

The ASPI was up 82.57 points at 20,316.91, while the more liquid S&P SL20 was up 0.45 percent, or 26.19 points, at 5,788.75.

The ASPI ended the week down 496 points from last Friday, amidst a mixed week of trading.

Positive contributors to the ASPI were Dialog Axiata (up 0.91 percent at 44.50 rupees), Hatton National Bank (up 0.93 percent at 379.00 rupees), Commercial Bank of Ceylon (up 0.38 percent at 200.00 rupees), Richard Pieris and Company (up 4.30 percent at 26.70 rupees), and Laugfs Gas (up 7.35 percent at 40.90 rupees).

SMB Finance (down 9.09 percent at 1.00 rupee), LOLC Holdings (down 1.25 percent at 415.25 rupees), Haycarb (down 1.37 percent at 198.50 rupees), and Industrial Asphalts (Ceylon) (down 16.67 percent at 0.50 rupees) were top negative contributors.

Market turnover was 1.05 billion rupees. Diversified financials led turnover with 233.69 million rupees, followed by capital goods with 200.09 million rupees.

During the session, crossings in Lanka Milk Foods (LMF) in the first half of the trading day drew market interest, Raynal Wickremeratne, Head of Research and Strategy at NDB Securities, said.

“Usually 20,000 is also a psychological limit,” Wickremeratne said. “When it comes back closer to that, people also might feel like it’s worth buying, so that’s why sometimes coming close to that you might have a bit of a move.” (Colombo/Oct09/2026)

Fiscal

Sri Lanka Customs’ September revenue exceeds target by 32-pct

Friday October 9, 2026 2:05 pm

ECONOMYNEXT – Sri Lanka Customs exceeded its September target by 32.1 percent, while the revenue in the first nine months of 2026 jumped around 22 percent compared to the same period last year, official data showed.

Customs’ September revenue target was set at 195.6 billion rupees. However, the revenue-collecting body collected 258.3 billion rupees that month, exceeding the target by nearly a third, according to official data.

It also exceeded the cumulative target for the first nine months by 29.2%, achieving 2,117 billion rupees.

Last year, Customs collected a record 2,551 billion rupees in revenue, exceeding a revised target of 2,241 billion rupees for the year and achieving 64.2% higher revenue than the previous year’s revenue of 1,553 million rupees.

Customs has set a revenue target of 2,207 billion rupees for this year, 13.5% less than last year as it expects a significant decline in car imports. Data showed it achieved 95.9% of this year’s target in the first nine months.

Analysts expect the revenue collecting body to achieve its 2026 full year target by mid-October,

Sri Lanka Customs’ revenue jump is largely due to stronger enforcement, improved valuation practices, and a rebound in import volumes after years of contraction.

Following the 2022 economic crisis, imports fell sharply as the country imposed restrictions to conserve foreign exchange.

However, with the stabilization of reserves, the relaxation of certain import controls, and a steady recovery in consumer demand, customs collections from import duties, excise, and other levies have risen.

Officials note that tighter monitoring of under-invoicing and misdeclaration of goods has also contributed to boosting state revenue.

The combined effect of increased import activity, currency movements, and stricter enforcement has positioned Customs as one of the top revenue sources for the Treasury in 2025, providing a vital cushion as the state works to meet fiscal targets under the IMF-supported program. (Colombo/October 09/2026)

ICT

IESL, Dialog open Sri Lanka entrepreneurs challenge

Friday October 9, 2026 1:35 pm

ECONOMYNEXT – The Institution of Engineers, Sri Lanka (IESL) and Dialog Axiata have launched the IESL National Startup Challenge, for aspiring entrepreneurs to transform innovative ideas into commercially viable, investment-ready startups.

The competition invites Engineering undergraduates, practitioners and participants in an Open Category for Non-Engineers to submit ideas across 12 innovation verticals.

“The IESL National Startup Challenge is designed to turn innovative ideas into viable businesses by connecting aspiring entrepreneurs with industry expertise, mentorship and continuous practical support,” Eng Jasmine Nanayakkara, Chairperson of the Entrepreneurship Forum at the Institution of Engineers, Sri Lanka, said.

“By encouraging our engineers and aspiring founders to create, commercialise and scale solutions, we aim to contribute to new ventures, new opportunities and meaningful job creation for Sri Lanka’s skilled and educated next generation.”

Participants will progress through idea development, pitching, incubation, prototyping, validation, minimum viable product development and business scaling, supported by industry experts, mentors and ecosystem partners.

The programme will culminate in a Top 10 selection, with the first-place winner receiving an award of 1 million rupees.

Each of the Top 10 teams will receive a Dialog Digital Startup Support Package valued at 250,000 rupees, comprising selected Dialog digital products and services.

Dialog is providing technical expertise, mentors and digital resources to help participating teams develop, validate and scale their solutions.

“Dialog is extending its digital capabilities, mentorship and ecosystem support to help promising teams progress from concept to validation and investment readiness,” Dialog Axiata said.

The National Startup Challenge also brings together a network of partners, including The Ceylon Chamber of Commerce as Ecosystem and Mentoring Partner, Helago as Official Mobility Partner, Helakuru as Official Digital News Partner, and Real Life as Official Climate Action Partner.

Applications are now open via www.iesl.lk/announcements, giving aspiring entrepreneurs an opportunity to access the resources and funding they need to succeed. Applications close on 16th November 2026. For more information, contact mgr.pub@iesl.lk / 071 109 4393. (Colombo/Oct9/2026)

Markets

Sri Lanka stocks trend higher, ASPI up 0.86-pct

Friday October 9, 2026 12:01 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange opened higher on Friday, CSE data showed, with the benchmark All Share Price Index moving up 0.86 percent.

The ASPI was up 174.62 points at 20,408.96, while the more liquid S&P SL20 was up 0.86 percent, or 49.77 points, at 5,812.33.

Positive contributors to the ASPI were Commercial Bank (up 0.88 percent at 201.00 rupees), Dialog Axiata (up 1.59 percent at 44.80 rupees), Distilleries Company of Sri Lanka (up 1.76 percent at 52.00 rupees), and Hatton National Bank (up 1.20 percent at 380.00 rupees).

SMB Finance (down 9.09 percent at 1.00 rupee), Haycarb (down 0.75 percent at 199.75 rupees), Malwatte Valley Plantations (down 1.79 percent at 55.00 rupees), and Odel (down 4.04 percent at 9.50 rupees) were top negative contributors.

Market turnover was 343.62 million rupees. Capital goods led turnover with 77.51 million rupees.

E.B. Creasy & Company PLC announced that it has executed a corporate guarantee of 50 million rupees with effect from September 30, 2026, on behalf of its subsidiary, E. B. Creasy Logistics Ltd, guaranteeing banking facilities obtained by the company. The company stated that the delay in making the disclosure was due to a delay in receiving official notification from the bank on the execution of the guarantee. (Colombo/Oct09/2026)

Corruption

Sri Lanka passes controversial Anti-Corruption amendment amid IMF, Opposition warnings

Friday October 9, 2026 11:06 am

ECONOMYNEXT — Sri Lanka’s Parliament on Thursday passed the Anti-Corruption (Amendment) Bill with amendments and without a vote, despite concerns raised by the opposition, civil society, and the International Monetary Fund (IMF).

The legislation amends the Anti-Corruption Act, No. 9 of 2023, a landmark piece of legislation which was adopted to align Sri Lanka’s domestic laws with international standards, particularly the United Nations Convention Against Corruption (UNCAC).

The legislative changes had also drawn caution from the International Monetary Fund.

IMF Mission Chief for Sri Lanka Evan Papageorgiou previously warned that proposed amendments risked weakening key transparency safeguards, particularly around the asset declaration framework and public ownership registers, which form part of governance benchmarks under the country’s economic reform program.

Opposition warns of weakened oversight

The main opposition Samagi Jana Balawegaya (SJB) argued that the amendments create loopholes that shield public officials from scrutiny.

SJB Parliamentarian Mujibur Rahman pointed out that under the new provisions, public access to asset declarations of public officials is limited solely to filing formal complaints, rather than allowing scrutiny by researchers or journalists, backed by penalties of up to a one-year prison sentence and a 100,000-rupee fine.

“Because of this harsh penalty, no one will come forward to look into these matters. Knowing that this amendment could subject them to a 100,000-rupee fine and prison time, everyone will be discouraged from probing further,” Rahman said.

Rahman criticized raising the threshold for state-owned enterprises requiring asset declarations from a 25-percent government shareholding to over 50 percent, which excludes partially state-owned entities.

He raised concerns over the removal of declaration requirements for household cohabitants and the exclusion of bodies such as the National Olympic Committee.

There were several issues with the new legislation, he pointed out, including restricting the manner in which publicised asset declarations can be used by the public, failing to provide a clear definition regarding the redaction or removal of information disclosed in asset declarations, and removing the requirement to declare the assets and liabilities of persons cohabiting in the same household.

“Why are you now bringing these amendments to that Act? The primary objective you initially proposed in bringing amendments to this Act was specifically to shield ministers, MPs, and public servants by concealing their assets and liabilities.”

“You have compromised the very public mandate you received. These amendments turn their back on that mandate. You have discarded the transparency and accountability demanded by that mandate. That is why the assets and liabilities of your ministers and MPs became a subject of debate in recent times.”

Allegations were raised against National People’s Power ministers and MPs when they the law first required them to make asset declarations.

“How was so much wealth acquired? It was precisely because of those allegations that you sought a shield to ensure that the assets and liabilities of ministers, MPs, and public officials would not be openly discussed.”

Following public outcry and opposition from civil society organisations, the government was forced to remove ministers and MPs from that shield and restrict that protection solely to public officials, the legislator said.

A redacted copy of a public official’s assets and liabilities can be obtained under the amended Act; but according to Section 11(2) under the new amendment, it can only be obtained strictly for the purpose of lodging a complaint.

“You cannot obtain copies to conduct investigative journalism or carry out research. And if someone is deemed to have “misused” it, it becomes an offence punishable not merely by a fine of 100,000 rupees, but by imprisonment of up to one year!”

“Defamation lawsuits can already be filed to claim damages. While such laws already exist, why introduce this new provision?”

“Because of this harsh penalty, no one will come forward to look into these matters. People will be intimidated. If someone tries to investigate whether a public official has illicitly acquired wealth, knowing that this amendment could subject them to a 100,000-rupee fine and prison time, everyone will be discouraged from probing further.

The new law does not conform to international benchmarks, Rahman said.

“We can define this amendment as nothing less than an incentive for corruption. That is why this clause has been identified as failing international standards. Why reverse this progress?”

“By reversing this, you are indirectly providing a protective cover for public officials to engage in corruption.

“Amid the perks and privileges granted to public officials, those cannot be traced; investigating them comes to a halt. Is there a hidden scheme beneath this to utilize those perks and privileges granted to public officials to target and hunt down opposition political leaders in this country? Because they can be weaponized. Because no one can investigate them! What they receive remains concealed.”

Dismantling the requirement that a public official must declare not only their own assets, but also the assets of individuals cohabiting in the same household facilitates corruption Rahman said.

“Typically, corrupt individuals register stolen wealth in the names of those closest to them. That is a classic tactic of corruption. It is being done even now, as you well know! When tracing the assets of certain individuals today, they are not registered under their own names, but under the names of third parties. You are removing that clause!”

“This is not what the people who voted for you expected. The people granted you a mandate for transparency, accountability, and the eradication of corruption. Yet, having secured that mandate, instead of strengthening the Act, diluting it and providing cover to the corrupt is deeply regrettable.”

Under the amended Act, officials appointed to state institutions where the government holds a 50 percent shareholding must submit their asset declarations. The threshold was previously 25 percent.

“What is the logic behind excluding entities holding between 25% and 50%? How can you guarantee that corruption will not occur through appointed officials in those entities? A multitude of serious doubts and suspicions have been created by your actions.”

Court rulings

The approval of the amendments to the Act follow a determination by the Supreme Court last month on petitions filed by Transparency International Sri Lanka (TISL).

Speaker Jagath Wickramaratne had announced that the court found Clause 17 unconstitutional without a two-thirds parliamentary majority and a national referendum.

The court also determined that repealing Section 80(1)(e) — which requires declarations from household cohabitants — was inconsistent with equal protection rights under Article 12(1) unless passed by a special majority.

Government defends practical fixes

Defending the bill during the parliamentary debate, Prime Minister Harini Amarasuriya rejected allegations that the government was weakening the anti-graft framework.

She claimed the amendments were introduced to resolve operational and human resource constraints, while introducing provisions to recover stolen public funds, which were missing in the original 2023 law.

“This is, in fact, an attempt to resolve the practical challenges, institutional challenges, and human resource issues encountered in implementing the anti-corruption process for the first time in Sri Lanka’s history, rather than diluting it,” Amarasuriya said. (Colombo/Oct09/2026)