By: Staff Writer
January 18, Colombo (LNW): Sri Lanka’s effort to restructure the Ceylon Electricity Board (CEB) and introduce a new National Electricity Policy is facing mounting scrutiny from the country’s private sector, with leading chambers warning that the proposed reforms risk undermining affordability, investment confidence, and long-term energy security.
A joint submission by the Ceylon Chamber of Commerce and six major industry associations acknowledges the urgent need to reform a financially distressed electricity sector. However, it argues that the Draft National Electricity Policy fails to address several core issues that are essential for a sustainable and modern power system.
These include clear commitments to decarbonisation, incentives for renewable energy, competitive market structures, and the long-term financial viability of the sector.
At the heart of the concerns are proposed tariff reforms. The draft policy outlines the gradual removal of cross-subsidies and limits electricity subsidies to households consuming less than 30 kilowatt-hours per month.
Business groups caution that, without comprehensive socio-economic analysis, these changes could restrict access to affordable electricity for low- and middle-income consumers while transferring financial risk back to the State through indirect fiscal pressures.
The restructuring framework also raises red flags for renewable energy development. Provisions allowing uncompensated curtailment of renewable generation, the removal of feed-in tariffs, and mandatory time-of-use tariffs for rooftop solar users are viewed as policy shifts that weaken revenue certainty. Industry representatives warn that such measures could render renewable energy projects un-bankable, especially for international lenders who require predictable cash flows.
Beyond immediate financial impacts, the chambers highlight a deeper structural issue: the draft policy does not adequately reflect the realities of modern electricity systems. There is limited focus on energy storage, grid flexibility, competitive power markets, or the potential for cross-border electricity trading elements increasingly central to energy resilience and cost reduction.
The joint submission calls for a comprehensive revision of the policy, stronger alignment with the Electricity Act, and renewed stakeholder consultation. While supportive of reform in principle, the business community argues that poorly designed restructuring could delay Sri Lanka’s energy transition and weaken investor confidence at a time when the country urgently needs capital, technology, and policy certainty.
