Stocks & Companies

Sri Lanka’s WindForce ‘A+(lka)’ rating affirmed by Fitch

Thursday January 29, 2026 11:57 am

ECONOMYNEXT – Fitch Ratings has affirmed Sri Lanka-based power generator WindForce’s National Long-Term Rating at ‘A+'(lka), with a stable outlook, based on its growing scale as a prominent renewable power generator in the island and several regional markets.

“WindForce’s rating reflects its growing scale as a prominent renewable power generator in Sri Lanka and several regional markets, its resource diversity and contractual cashflows via long-term power purchase agreements (PPAs),” Fitch Ratings said.

However, the rating agency pointed out that WindForce’s rating is constrained by the credit profile of CEB, the sole electricity transmitter and distributor in Sri Lanka.

The Fitch statement is reproduced below:

Fitch Affirms Sri Lanka’s WindForce at ‘A+(lka)’; Outlook Stable

Fitch Ratings has affirmed Sri Lanka-based power generator WindForce PLC’s National Long-Term Rating at ‘A+'(lka). The Outlook is Stable.

WindForce’s rating reflects its growing scale as a prominent renewable power generator in Sri Lanka and several regional markets, its resource diversity and contractual cashflows via long-term power purchase agreements (PPAs). WindForce’s rating is constrained by the credit profile of Ceylon Electricity Board (CEB, A(lka)/Stable), which is a key off-taker accounting for over 80% of WindForce’s EBIT.

Fitch forecasts WindForce’s EBITDA net leverage to rise in the financial year ending March 2027 (FY27) on high debt-funded capex for new generation plants and reduce thereafter as the new plants are commissioned, driving the Stable Outlook. However, inability to deleverage in FY28 in line with our expectations could pressure WindForce’s rating.

Key Rating Drivers

Temporarily High Leverage on Capex: WindForce expects capex of over LKR40 billion for solar and wind power plants in the next two years with most outflows in FY27. This includes a 100MW solar plant with integrated battery storage, which is Sri Lanka’s largest renewable energy project, under a joint venture with Lakdhanavi Ltd (AA-(lka)/Stable). Fitch estimates WindForce’s generation capacity to rise to over 200MW by FY28 as a result.

EBITDA net leverage will rise to around 6.8x in FY27, before moderating to around 4.6x by FY28 as the plants are commissioned. Execution risks for these projects are low, supported by the company’s record in similar projects, the limited construction complexity of solar and wind projects, the requisite regulatory approvals and offtake agreements in place, with transmission lines constructed or right-of-way established. Additionally, the plants’ long-term PPAs with CEB are in place at preset tariffs, mitigating demand risk.

Counterparty Constrains Rating: WindForce’s rating is constrained by the credit profile of CEB, the sole electricity transmitter and distributor in Sri Lanka, despite CEB’s improved financial performance. CEB’s rating depends on support from the Sri Lankan sovereign (Long-Term Local-Currency Issuer Default Rating (IDR): CCC+; Long-Term Foreign-Currency IDR: CCC+).. WindForce derived around 70% of its EBIT from CEB in FY23-FY25, with the share rising to around 80% in FY25 after the commissioning of the Kebitigollewa solar project. We expect WindForce’s cash flow exposure to CEB to increase in FY26-FY29 once new projects are commissioned.

Risks to Cost-Reflective Tariffs: Fitch sees risks to CEB’s implementation of cost-reflective tariffs, which could weigh on its balance sheet and pressure settlements to domestic power producers. This is due to the government’s competing priorities of managing inflation, CEB’s financial health, and the state’s own finances. CEB’s EBIT turned negative in 1Q25 due to costs rising faster than approved tariff increases. However, tariff revisions since have improved CEB’s EBIT to breakeven levels in 9M25. WindForce’s average receivable days are steady at around 40 as of 30 September 2025, compared to the peak of around 350 days in FY23.

Steady EBITDA Margin: We expect EBITDA margins to improve from around 65% in FY25 to around 70% in FY26-FY28. This reflects operating expenses normalising following increased repairs and maintenance at wind plants, which were deferred from previous years. WindForce’s PPAs offer long-term cash flow visibility, with a weighted-average remaining contract life of over 10 years, but generation volume can be affected by seasonal and climatic patterns. This is mitigated by its diversified portfolio, comprising wind (74MW), solar (55MW) and hydro (15MW) , totaling 145MW, on an alternating current equivalent basis (AC), across 23 power plants excluding associates and joint ventures.

Peer Analysis

WindForce is rated one notch below domestic power producer and engineering, procurement and construction contractor Lakdhanavi. The difference is on account of Lakdhanavi’s larger operating scale as a critical base-load power generator in Sri Lanka as well as its higher geographic and business diversification.

Both Lakdhanavi and WindForce have significant exposure to CEB. However, Lakdhanavi also has operations and maintenance (O&M) services, manufactures transformers and switchgears, and offers galvanising services, which provides a degree of diversification. We also believe CEB is likely to prioritise payments to Lakdhanavi even in situations where its own financial profile is stretched, given Lakdhanavi provides O&M services to one of Sri Lanka’s largest power plants, and is investing in a large liquefied natural gas power plant, all of which are critical to Sri Lanka’s power generation and to CEB’s future strategy.

Resus Energy PLC (A-(lka)/Stable), a domestic power producer, is rated two notches below WindForce. Resus also benefits from contractual revenue visibility via its PPAs with CEB. However, Resus’ lower rating reflects its tighter liquidity than WindForce and smaller operating scale with narrower access to domestic banks.

Vidullanka PLC (A+(lka)/Stable) is rated at the same level as WindForce. WindForce has larger operating capacity than Vidullanka and more diversified power generation resources. This is counterbalanced by Vidullanka’s exposure to the state-owned utility of Uganda (B/Stable) and concentration in hydropower generation. Most of Vidullanka’s cash flow stems from overseas, while most of its debt is onshore with Sri Lankan banks, exposing the company to potential repatriation risks. However, Vidullanka’s track record of overseas receipts has been steady.

Fitch’s Key Rating-Case Assumptions

Revenue to remain flat in FY26 then increase by over 30% annually in FY27 and FY28 from new projects

EBITDA margin of around 70% in FY26 and FY27;

Receivable days steady at around 40

Capex of around LKR15 billion in FY26 and around LKR30 billion in FY27

Dividend payout of 80% of prior year profit.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
EBITDA net leverage above 5.0x for a sustained period;
EBITDA interest coverage below 1.5x for a sustained period.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
A sustained and substantial reduction in counterparty risk, as reflected in a continued improvement in CEB’s credit profile.

Liquidity and Debt Structure

WindForce’s liquidity is subject to timely collection of dues from CEB. The company reported over LKR1.3 billion of readily available cash as of 30 September 2025 and had access to around LKR7 billion in unutilised, albeit uncommitted, credit lines from local banks against LKR1.4 billion of debt maturing in the next 12 months. Maturing debt mainly comprises the current portion of long-term debt obtained to fund the investments in its power plants.

We expect the company to generate negative FCF in the near-to-medium term due to high capex. However, WindForce has adequate access to domestic banks, as most banks are willing to provide longer-tenured facilities for the company’s operating power plants that have more than 10 years remaining under their PPAs.

Issuer Profile

WindForce is a leading renewable power producer in Sri Lanka with a total installed power generation capacity of around 145MW (excluding associates and joint ventures) as of 31 March 2025. Most of the installed capacity is in Sri Lanka (132MW), with the rest in Uganda (13MW). The company is listed on the Colombo Stock Exchange.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.

Markets

Sri Lanka stocks close down 0.60-pct, dragged by HNB and LOLC

Friday November 13, 2026 3:28 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Friday, CSE data showed, with the benchmark All Share Price Index moving down 0.60 percent.

The ASPI was down 133.22 points at 22,024.18, while the more liquid S&P SL20 was down 1.06 percent, or 67.55 points, at 6,298.02.

The ASPI ended the week up 784.53 points from last Friday.

Positive contributors to the ASPI were Dialog Axiata (up 0.40 percent at 50.20 rupees), Distilleries Company of Sri Lanka (up 0.52 percent at 58.30 rupees), Aitken Spence (up 3.60 percent at 151.00 rupees), Ceylon Tobacco Company (up 1.05 percent at 1,828.50 rupees), and LOLC Finance (up 1.96 percent at 5.20 rupees).

Hatton National Bank (down 1.88 percent at 403.75 rupees), Richard Pieris and Company (down 6.21 percent at 27.20 rupees), LOLC Holdings (down 2.17 percent at 405.00 rupees), Sampath Bank (down 1.91 percent at 154.00 rupees), and Singer (Sri Lanka) (down 2.40 percent at 77.30 rupees) were top negative contributors.

Market turnover was 3.23 billion rupees. Capital goods led turnover with 869.21 million rupees. (Colombo/Nov13/2026)

Economy

Sri Lanka MP slams budget speech for omitting Tamil national question

Friday November 13, 2026 2:56 pm

ECONOMYNEXT – A Sri Lanka legislator has voiced strong disappointment that the President’s budget speech failed to make a single mention of the Tamil national question.

“It is very unfortunate that in His Excellency the President’s speech, there has not been a single word mentioned about the Tamil national question. Not a single word,” Shanakiyan Rasamanickam said.

“A budget speech generally, is a policy direction of the government for the next year. The budget speech is not only a statement of the country’s fiscal position or the economy’s position. It is the country’s, the government’s, plan, or what the government plans to do the following year. That’s a policy statement.”

Former presidents would at least mention the Tamil question even if it was not resolved, he said.

Former President Ranil Wickremesinghe in his speech, in his policy statement, he would mention: “The Tamil national question must be resolved,” Rasamanickam said.

Former Presidents Maithripala Sirisena and Gotabaya Rajapaksa also mentioned that the national ethnic question must be resolved, he added.

“Every President, every country’s Head of State, in their policy statements, have acknowledged the fact that there is an unresolved national issue, the Tamil national question, that it needs to be resolved. Various governments have proposed various mechanisms; none of them have succeeded, but at least it was mentioned.”

This year’s budget made allocations for the Office of Missing Persons, and the Office of Reparations.

“But the domestic mechanism is a mechanism that the victim community has rejected. So you all are allocating money to a mechanism where the victim community is not going to be part of.”

Last year’s budget 1 billion was allocated to be spent on the Trincomalee and Jaffna airports.

“Where was that 1 billion for the Trincomalee and Jaffna airports spent last year?”

“The trajectory of this government, Honourable Deputy Speaker, is worrying to me. It’s really worrying to me. Because if the objective is to say that there is no Tamil national question, if the objective is to say that you all have resolved any ethnic issue that this country faced, then Honourable Deputy Speaker, then I think the Tamil people will teach this government a very, very, very harsh lesson in the future.” (Colombo/Nov13/2026)

Bonds & Forex

Sri Lanka sells extra Rs6.5bn Treasury bills after auction

Friday November 13, 2026 12:32 pm

ECONOMYNEXT – Sri Lanka has sold 6,500 million rupees of treasury bills offered on tap at an average rate of 9.95 percent, the public debt management office said, bringing the total of bills sold in the week to 85.562 billion rupees.

The issue offered 90 billion.

Total market subscription was 6.5 billion rupees.

The debt office sold a 12-month bill at 9.95 percent.

On Wednesday (11) the debt office raised 79 billion rupees of 3, 6 and 12 month bills after offering 90 billion.

The settlement date is November 13. (Colombo/Nov13/2026)

Construction and Real Estate

Access Engineering Sept quarter group net profit surges 200-pct to Rs4.75bn

Friday November 13, 2026 12:15 pm

ECONOMYNEXT — Sri Lanka’s Access Engineering PLC recorded a group net profit attributable to equity holders of Rs. 4.75 billion for the quarter ended September 30, surging 200 percent from Rs. 1.58 billion a year earlier, interim accounts showed.

Basic earnings per share rose to Rs. 4.08 for the September quarter, up from Rs. 1.58 previously.

Quarterly group revenue expanded 36 percent to Rs. 20.39 billion from Rs. 14.94 billion, underpinned by condominium property handovers — reflected in inventories dropping Rs. 7.69 billion since March to Rs. 35.71 billion — alongside strong automobile sales and steady civil engineering execution.

Cost of sales rose at a slower 27 percent to Rs. 14.34 billion, lifting gross profit by 64 percent to Rs. 6.05 billion and expanding gross margins to 29.7 percent from 24.7 percent.

Other income jumped 144 percent to Rs. 259.9 million, while administrative expenses rose 75 percent to Rs. 1.14 billion, leaving operating profit up 64 percent at Rs. 5.16 billion.

However, finance costs more than doubled, rising 107 percent to Rs. 1.18 billion on elevated group borrowings of Rs. 43.74 billion, partly offset by finance income climbing 302 percent to Rs. 42.2 million.

Share of results from equity-accounted investees rose 122 percent to Rs. 26.7 million, pushing pre-tax profit up 56 percent to Rs. 4.05 billion.

Income tax swung to a net reversal of Rs. 186.6 million from an expense of Rs. 804.1 million, boosted by deferred tax assets on unrelieved losses from a 100 percent enhanced capital allowance claimed by 60 percent-owned radiopharmaceutical subsidiary Access Medical Tracers (Private) Limited.

Total period profit rose 136 percent to Rs. 4.24 billion, with non-controlling interest declining 24 percent to Rs. 164.9 million following last year’s buyout of minority shareholders in Harbour Village (Private) Limited.

No separate exchange gain or loss was itemized in quarterly earnings, though foreign currency translation via associates recorded a Rs. 17.4 million loss in other comprehensive income, alongside USD 16.6 million in corporate guarantees.

Notes also flagged an expected Rs. 1.45 billion recovery from the terminated South Asia Commercial and Logistics Hub project, a Rs. 225 million post-quarter legal settlement already provided for, and a Supreme Court appeal over a 2011/12 PAYE tax ruling.

Group assets stood at Rs. 132.4 billion as of September 30, with net asset value per share at Rs. 46.70, as the Employees’ Provident Fund raised its stake to 5.69 percent.

Access Engineering shares closed at 80.00 rupees at the end of September and are currently trading around 85.80 rupees. (Colombo/Nov13/2026)

Economy

Sri Lanka private sector says timely implementation of Budget 2027 key

Friday November 13, 2026 11:43 am

ECONOMYNEXT – Private sector body, The Ceylon Chamber of Commerce, said it was encouraged by the broad direction of Budget 2027, noting that it reinforces Sri Lanka’s commitment to economic transformation while maintaining policy continuity, macroeconomic stability, and fiscal discipline.

“This continuity is particularly important as the country seeks to transition from economic stabilisation to a more durable, investment-led growth trajectory.”

The chamber also noted several areas where the Budget could have placed greater emphasis to strengthen the country’s growth prospects.

“In particular, there is a need for a stronger focus on attracting Foreign Direct Investment (FDI), accelerating factor market reforms, particularly in land and labour, and fast-tracking public procurement reforms to improve the efficiency and speed of project implementation.

“More targeted and actionable proposals could have been introduced to unlock the potential of sectors with significant growth opportunities, including tourism, agriculture, IT/BPO and logistics.”

The chamber said the budget contains positive measures aimed at enhancing competitiveness, and external sector resilience, while presenting opportunities for focus on sectors that can accelerate growth.

“A number of the key structural reforms identified in last year’s Budget have been carried forward and strengthened, providing greater certainty and predictability to businesses and investors.

“These include the continued implementation of the Trade National Single Window (TNSW), the phased removal of para-tariffs, the rollout of the Digital ID framework, efforts to expand market access through new Free Trade Agreements (FTAs), the strengthening of one-stop-shop investment facilitation mechanisms, progress on Customs reforms, the expansion of Bandaranaike International Airport (BIA), enhanced financing support for SMEs, and reforms relating to the management of State-Owned Enterprises.”

The CCC said that more than 20 proposals submitted by it have been reflected in Budget 2027.

These include measures to strengthen investor facilitation through the establishment of a professionally managed investment promotion agency; continued efforts to improve trade facilitation and export competitiveness; the Government’s consideration of a successor programme with the International Monetary Fund (IMF); accelerated progress on key legislative reforms; the expansion of digital government services; and the promotion of cashless payments and broader digital adoption. The Budget has also captured several priorities relating to energy security, including the accelerated deployment of Battery Energy Storage Systems (BESS) and investments in fuel storage infrastructure, initiatives to optimize underutilized agricultural land, measures to support the expansion of the digital economy and the IT/BPO sector, and tax reforms to support exporters, including the acceptance of newly VAT-registered exporters as eligible exporters.

“The inclusion of these priorities reflects the value of sustained public-private dialogue and demonstrates increasing alignment between national policy objectives and the needs of a competitive, export-oriented economy.

“The priority now must be effective and timely implementation to translate policy commitments into investment, competitiveness, exports and sustainable growth.” (Colombo/Nov13/2026)