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Tuesday May 21st, 2024

Sri Lanka electricity reforms to parliament in September: Minister

ECONOMYNEXT – Sri Lanka is planning to bring a reform plan to unbundle Ceylon Electricity Bord to parliament in September separating generation, transmission and generation, Energy Minister Kanchana Wijesekera said.

After unbundling there will be four distribution companies.

They could state or public private partnerships but all would be required to provide a high level of service and high-quality electricity to consumers, Wijesekera said.

Minister Wijesekera was speaking at a forum organized by the Asian Development Bank where two publications on the ‘Lanka Electricity Company’ and the ‘On the Road to Full Electrification in Sri Lanka’.

The ADB was supporting the electricity sector with expertise and is also working the near term under and International Monetary Fund program, Wijesekera said.

The ADB had a long history is supporting reforms and network development. The first ‘unbundling’ of the power sector dated back to the 1980s, with the setting up of Lanka Electric Company.

Lanka Electric Company was a distribution company set up in 1980s with the support of the ADB. It took over fragmented distribution networks run by municipal councils and local authorities.

Only 12 percent of country was electrified at the time.

In 1982, there were 219 such networks with high losses, when KKYW Perera was secretary to the ministry of power.

The CEB provided power to the Municipal Councils but network losses were 50 percent, Tilak Siyambalapitiya, power sector analyst and former planner said. At the time CEB’s losses were 17 percent.

H S Subasinghe, a CEB general manager was appointed as Chairman of LECO, which took over the ailing networks. Subasinghe served a total three terms and was responsible pioneering technology.

Old networks were completely pulled down and replaced with new technology, supported by ADB credits.

LECO used overhead insulated bundled conductors instead of bare wires, reducing theft.

Transformers mounted on a single concrete pole designed by LECO on 11kV lines with short low voltage connections to customers.

“The iconic pole that you now see was designed by engineer M Chandrasena,” Siyambalapitiya said.

LECO has since brought energy losses to 4 percent. LECO was making profits due to lower than allowed losses.

ADB had played key role in funding the Ceylon Electricity Board and making Sri Lanka 100 percent electrified.

The CEB designed a series of rural electrification schemes, which were given to lenders to fund. The ADB was a key financier of the network development.

By 2000, 63 percent of the population had electricity.

By 2016 100 percent of the country was electrified. Among key policy changes that allowed it was a decision to expand networks to non-commercial areas and give financial support to less affluent customers to wire their houses.

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Sri Lanka declares May 21 as National Mourning day over Iranian President’s death

ECONOMYNEXT – Sri Lanka declared a national mourning day on Tuesday, May 21 in view of expressing its solidarity with Iran after sudden death of Iran President Ebrahim Raisi following a helicopter crash.

President Raisi and eight others including Iranian Foreign Minister Hossein Amir Abdollahian were killed in the crash when the helicopter had a “hard landing” reportedly due to adverse weather conditions with heavy fog. However, President’s two convoy helicopters reached the destination safely.

“The Sri Lankan government has declared a national mourning day on tomorrow (May 21) on behalf of the sudden death of Iranian president Mr. Ebrahim Raisi,” the Department of Government Information said in a statement.

It also urged all the state institutions have to hoist the national flag half mast.

Raisi was in Sri Lanka on April 24 to launch the Uma Oya dam on a one-day official visit amid tight security. His helicopter crashed when he was returning to Iran after launching a dam in the Azerbaijan border.

President Raisi is seen as a hardliner and a potential successor to Supreme Leader Ayatollah Ali Khamenei.

Earlier this month, Sri Lanka’s Foreign Minister Ali Sabry said the island nation will deal with Iran for investments and trade without being caught into the United States-led sanctions.

Sri Lanka was unable to receive $450 million from Iran for a recently opened Uma Oya multipurpose project started before the sanctions.

Sri Lanka now exports tea to Iran for no dollar payment. Instead, Sri Lanka tea producers are paid by the state-owned Ceylon Petroleum Corporation (CPC) in rupees for the pending crude oil import payments for Iran.

President Ranil Wickremesinghe expressed his condolences on the tragic incident.

“Sri Lanka is deeply shocked and saddened by the tragic death of President Ebrahim Raisi, Foreign Minister Amir Abdollahian and other senior Irani official,” he said in his official X-platform.

“I express my deepest sympathies and sincere condolences to the bereaved families, the government and the people of Iran.”

Raisi, a Muslim jurist, served as the eighth president of Iran from 2021 until his death. (Colombo/May 20/2024)

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Sri Lanka helps launch Global Blended Finance Alliance

ECONOMYNEXT – Sri Lanka has joined a group of nations led by Indonesia which aims to mobilise capital to achieve carbon neutrality, Minister of Water Supply and Estate Infrastructure Jeevan Thondaman said.

The Global Blended Finance Alliance mooted by Indonesia in 2018, was formally launched at the World Water Forum in Bali today.

Among the other founding members are Fiji, France, UAE, Kenya, Luxembourg and Canada.

“Through our collective efforts, the Global Blended Finance Alliance aims to mobilise both public and private capital to help nations achieve carbon neutrality and the SDGs,” Thondaman said on social media platform X (twitter).

“The world has a USD 2.5 trillion funding gap to achieve the Sustainable Development Goals (SDGs) by 2030,” he said.

Blended finance is the strategic use of development finance, such as public and/or philanthropic funds, for the mobilisation of additional commercial finance towards sustainable development in developing countries. (Colombo/May20/2024)

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Sri Lanka rupee closes slightly stronger at 299.60/75 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee appreciated slightly to close at 299.60/75 to the US dollar on Friday, from 299.70/80 the previous week, dealers said. Bond yields were up.

A bond maturing on 15.12.2026 closed up at 10.15/35 percent from 10.05/15 percent.

A bond maturing on 15.09.2027 closed up at 10.45/55 percent from 10.25/40 percent.

A bond maturing on 01.07.2028 closed at 10.80/90 percent.

A bond maturing on 15.01.2030 closed at 11.70/80 percent.

A bond maturing on 01.10.2032 closed up at 11.90/12.05 percent from 11.85/12.00 percent. (Colombo/May20/2024)

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