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Wednesday February 1st, 2023

Sri Lanka renewable energy sector may go to court over unsettled CEB arrears

solar panels and wind turbines generating electricity at green energy renewable power plant with blue sky background

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)

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Sri Lanka bond yields down at close

ECONOMYNEXT – Sri Lanka’s bond yields were down at close following a bond auction on Wednesday, dealers said while a guidance peg for interbank transactions remained unchanged.

“The rates were steady at the auction,” a dealer said.

“This can be a signal to the market saying the rates will go down in the future.”

A bond maturing on 01.07.2025 closed at 32.40/60 percent, down from yesterday’s 32.60/85 percent.

A bond maturing on 01.05.2027 closed at 29.10/35 marginally down from yesterday’s 29.20/75 percent.

The Central Bank’s guidance peg for interbank US dollar transactions remained unchanged at 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 371.38 rupees on Friday, data showed. (Colombo/Feb 01/2022)

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Sri Lanka bill auction hits pothole after 2025 bond spike

ECONOMYNEXT – Sri Lanka sold only 45 billion rupees in Treasury bills at Wednesday’s auction after offering 120 billion rupees, data from the state debt office showed, amid market confusion over a spike in a two year bond at an earlier action.

30.1 billion rupees of 3-month bills were sold at 29.91 percent, unchanged from a week earlier after offering 60 billion rupees for auction.

5.1 billion rupees of 6-month bills were sold at 28.72 percent, flat after offering 30 billion.

10.3 billion rupees of 12-month bills were sold at 27.72 percent after offering 30 billion.

Phase II subscriptions have been opened.

The market was foxed after the 2025 bonds were accepted at sharply higher yield than market on January 30, dealer said.

There was further confusion as the there was an outright purchase of 2025 at around 29 percent earlier in January.

Some investors speculated that the authorities were trying to drive more buyers towards short end bonds as bill volumes were getting larger. (Colombo/Feb01/2023)

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Sri Lanka services exports down 5.9-pct in 2022

ECONOMYNEXT – Sri Lanka’s services exports were estimated to have fallen 5.9 percent to 1,876.3 million US dollars, the island’s Export Development Board said.

Services exports estimated is made up of ICT/BPM, construction, financial services, transport and logistics.

There are more than 500 ICT companies, the EDB said.

Sri Lanka’s merchandise exports were up 4.6 percent to US dollars 13.1 billion dollars in 2022 from 2021.

Sri Lanka’s goods exports are slowing amid lower growth in Western markets. (Colombo/ Feb 01/2023)

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