ECONOMYNEXT – Sri Lanka’s renewable energy sector is likely to go to court over non-payment of arrears by the state-run Ceylon Electricity Board (CEB) as discussions with CEB officials prove unfavourable, the Federation of Renewable Energy (FRED) said.
According to data shared by FRED, the CEB had 10 months’ worth of arrears totalling 35.18 billion rupees dating back to October 2021.
However, in June, the government had promised to pay back the arrears in instalments of 100 million rupees per day but after a few payments in June, the industry said it has not received anything so far.
Demanding their monies, FRED staged a protest in front of CEB headquarters on Wednesday 26.
“Talks with the CEB were not so favourable on their end, because the CEB is looking to preserve finances for coal procurement and we are most likely to go for a court case to get the money back,” Roshan Siriwardana, a spokesperson for FRED, said speaking to EconomyNext on Wednesday, October 26.
FRED representatives said they are on the verge of going bankrupt since they are not able to pay the salaries of their workers or run the plants.
They said the banks have been supportive so far and they have been negotiating with the banks to restructure their loans with the expectation that the CEB will pay their money at least in instalments.
But now they are unable to even pay the loan interest.
The FRED representatives added that with the electricity tariff hike, the CEB should be able to pay them at least five billion rupees per month and that would at least help them survive for the time being.
The sector is also seeing migration at all levels, from engineers to HR personnel.
A spokesperson for the CEB confirmed that it won’t be able to pay the money back yet.
“The CEB is likely to use up revenue for coal procurement because the 180 day credit period has been cancelled. We are using all our finances towards the coal procurement because this could have been paid by April 2023.”
Last month, FRED said Power & Energy Minister Kanchana Wijesekera promised the sector that by November their monies would be paid but FRED is unsure this will come to pass given the country’s economic situation. (Colombo/OCt26/2022)