Sri Lanka’s power sector struggled to meet the growing demand for electricity at acceptable reliability and sufficiently low cost during the decade leading to this project’s appraisal in 2010. The transmission system was weak and substantial investments were needed to strengthen the network and improve its reliability. About 15% of households—primarily in the rural areas—did not have access to electricity. A considerable portion of energy was also being generated through expensive oil-fired thermal processes, causing high fuel prices and posing a threat to the country’s energy security and the environment. Against this backdrop, it was imperative for Sri Lanka to enhance power services delivery by developing clean and renewable energy sources, reducing losses, and improving energy efficiency.
The Sustainable Power Sector Support Project was approved by the Asian Development Bank (ADB) in January 2011. Financed by two loans totaling $120 million, it was designed to expand the sector reforms that followed the approval of the Sri Lanka Electricity Act in March 2009 and were being supported by ADB under the Clean Energy and Access Improvement Project. Overall, it sought to contribute to providing reliable, adequate, and affordable power supply for sustainable economic growth and poverty reduction in Sri Lanka. It had three major components: (i) transmission system strengthening in Eastern, North Central, Southern, and Uva provinces; (ii) rural electrification expansion and distribution system improvement in Eastern and Uva provinces; and (iii) energy efficiency improvement and renewable energy development.
At completion, the project was able to achieve most of its output targets. 185 kilometers (km) of transmission lines and associated facilities and 912 km of distribution lines were constructed or upgraded. 11,772 new households, 3,642 of them poor and 1,885 women-headed, were connected to the grid. Reactive power devices were installed to reduce distribution losses. Labeling regulations for several electrical products were implemented. Energy efficiency testing laboratories were established, and energy-efficient lighting trials were also conducted.
Significant loan savings enabled the expansion of project scope, including the procurement of consulting services to design an innovative public lighting solution for the Galle Fort, a UNESCO world heritage site. Leveraging an additional ADB grant, the project also trained beneficiaries, particularly women, in the emerging income opportunities provided by enhanced electricity access and the use of microcredit to harness these opportunities.
However, due to several factors, key of which were a complicated implementation arrangement and inadequate implementing agency capacity, the micro hydro rehabilitation subproject was able to repower only 1 of the targeted 19 micro hydro installations. This resulted nevertheless in the avoidance of 320 tons of carbon dioxide equivalent emissions per year.
Delivery of almost all its output targets allowed the project to substantially achieve its intended outcome of improved coverage, efficiency, and reliability in electricity services delivery. As of 2016, electrification effectively reached 100%; total network losses were reduced to 9.6% from 14.6% in 2009 and continued to be on a downward trajectory.
The Ministry of Power and Energy was the executing agency. The Ceylon Electrical Board, which established three dedicated implementation units, was the implementing agency.
