ECONOMYNEXT – Economic stability achieved by Sri Lanka under President Ranil Wickremesinghe and policy changes had reduced renewable purchase prices, Energy Minister Kanchana Wijesekera said after investors bid steeply lower rates in a competitive tender in June, compared to earlier negotiated rates.
“The key factor is the economic & political stability that the President & the Government has brought in and the positive policy changes & legal frame work changes established in the sector..,” Minister Kanchana Wijesekera said in an x.com post.
“One of the key but not so popular decision was the cost reflective pricing which enabled the CEB to pay back the RE Developers on time making it easier for developers to raise financing.”
Sri Lanka’s Central Bank hiked rates in 2022 April to end money printed for two years to keep rates artificially low in a bid to boost growth and target potential output.
In 2023 the rupee was allowed to appreciate after deflationary policy triggered a balance of payments surplus from September 2022.
Interest rates have gradually come down as budget deficits were tackled and Ceylon Electricity Board and Ceylon Petroleum Corporation made profits.
A tender for a 50MW plant for Mannar came in at 4.88 US cents compared to 8.26 cents per unit negotiated with India’s Adani without competitive tender.
However a large number of proposals entertained as expressions of interest without competitive tender had draw fire from the opposition, unions and industry analysts.
Minister Wijesesekera said high feed in tariffs for smaller plants would also be revised after the Mannar tender and another tender for small plants that is being evaluated.
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Minister Wijesekera detailed some of the prices that have come from tendered and non-tendered projects.
1. Siyambalanduwa 100 MW Solar – USD 8 Cents – Lakdhabavi, Windforce, Blue Circle Consortium – 2023 August
2. Samanalawewa Floating Solar – 200 MW Bids received by 14 developers in March 2024 – Bids from USD 8 Cents to USD 15 Cents
3. Mannar 50 Mw Wind – WindForce PLC USD 4.88 cents, Vidulanka USD 4.98 cents, Lakdhanavi Ltd – USD 5.90 cents
4. 165 MW tender – May 2024 – All bids received are between Rs 15-29. Currently evaluated by CEB
Negotiated Tariffs from EOI projects & G-G 1.
Oddamawadi – 100 Mw – USD 8.76 cents – Orbital Energy
2. Mannar + Pooneryn – 484 Mw – Wind – USD 8.26 cents – Adani Green Energy