The Asian Development Bank (ADB) has agreed to provide a $200 million loan with a sovereign guarantee to the Ceylon Electricity Board to develop the first 100 MW wind park in Sri Lanka. The ADB’s board of directors approved the loan on October 24, 2017.
The proposed wind farm will be developed on Mannar Island in the Northern Province of Sri Lanka. The total cost of the project is estimated at $256.7 million, out of which the Ceylon Electricity Board will provide $56.7 million.
The project is set to establish procedures that will enable the Ceylon Electricity Board – the agency responsible for implementing and executing the project – to act as a wind park developer and attract the private sector to future wind power generation projects. The procedures will include establishing cost benchmarks and conducting competitive bidding for future wind power projects, as well as managing the flow of intermittent wind energy through the power system.
“The new wind power generation project will not only provide access to a clean and reliable power supply in Sri Lanka, but it will also create an environment for further wind power development through future public-private partnerships,” said Mukhtor Khamudkhanov, principal energy specialist with ADB.
“Diversifying the country’s power generation through clean, renewable energy sources will improve the country’s energy security and environment,” added Khamudkhanov.
Sri Lanka boosted its national electrification to more than 99 percent in 2016, but the power sector is still struggling to meet the growing demand for affordable and reliable electricity. With the share of thermal (coal and oil-fired) power still accounting for two-thirds of power generation in 2016, there is an urgent need to develop new clean energy sources such as wind and solar energy, reduce losses in the system, and boost energy efficiency.
With the approval of the $200 million loan, in 2017, the ADB has approved loans to the tune of $250 million for renewable energy in Sri Lanka. The ADB in September approved another $50 million loan to help fund rooftop solar power generation systems in Sri Lanka.
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Wendy is a co-founder of Mercom Capital Group, the parent company of Mercom India. Wendy is a contributing editor at MercomIndia.com and is responsible for content quality across the company and products. She has over 15 years of business and finance experience in the energy and technology markets. In addition to Mercom, Wendy has written for many other clean energy-focused blogs and publications. More articles from Wendy Prabhu.