Sri Lanka energy utilities to raise US$2.5bn through bonds
COLOMBO (EconomyNext) – Sri Lanka’s state-owned energy utilities are to issue 2.5 billion US dollars worth of bonds as part of a restructuring plan by the new government released Tuesday.
The financial restructuring of the debt-ridden Ceylon Petroleum Corporation and Ceylon Electricity Board is part of a wider 10-year energy sector plan announced by Power and Energy Minister Patali Champika Ranawaka.
One of the aims of the new plan is the broadening of energy sector investments to include bonds, debentures, public-private partnerships and "other novel financial instruments."
The CPC is to issue two billion US dollars in bonds while the CEB will issue 500 million dollars in debentures to restructure their debt portfolios, according to the Sri Lanka energy sector development plan for 2015-2025.
The issue of debentures and institutional bonds is a key part of the restructuring of the energy utilities which have been mismanaged and overstaffed over several decades.
The new government has also revamped energy pricing and has said it will adopt a market-based pricing formula where retail prices fluctuate according to changes in international prices.