Sri Lanka’s efforts to restore investor confidence are paying off, with Japanese-funded development projects restarting after 2-3 years of suspension. The clearest signal came this week as the government marked the completion of the Habarana-Veyangoda Transmission Line Project, a long-stalled initiative that has now become the first major Japanese-backed project to be completed since the 2022 debt default.
The project, financed by a concessional loan of JPY 9,573 million (about US$ 65 million / Rs. 21.5 billion) through the Japan International Cooperation Agency (JICA), built advanced 220kV low-loss transmission lines and substations, including the massive Habarana substation, now one of the largest in the country. Beyond the engineering achievement, the project symbolizes the success of Sri Lanka’s debt restructuring strategy in unlocking international development finance.
“This project is a vital part of Sri Lanka’s electricity system, ensuring stability, reliability, and greater capacity,” said Energy Minister Kumara Jayakody, addressing the ceremony. “It will help prevent the power failures we faced in the recent past. We appreciate the Japanese people’s steadfast friendship and support and eagerly await greater Japanese investment in Sri Lanka.
JICA Chief Representative KURONUMA Kenji highlighted broader advantages of the project: “A stable and efficient supply of power is the cornerstone of the economic development of the country. With the addition of cutting edge transmission infrastructure, the project reduces losses, allows for integration of renewable energy, and offers cleaner power to the public.”
A senior Finance Ministry official described the milestone as “the first tangible achievement of the bilateral debt restructuring agreement signed with Japan in March 2025. It shows that the international partners are reposing more faith in Sri Lanka’s recovery trend, which is crucial for future growth.”
Habarana-Veyangoda link is part of a package of 11 large-scale Japanese projects suspended in 2022 and now gradually revived. These include the second terminal of Bandaranaike International Airport, Kandy City Wastewater Project, Anuradhapura and Kalu Ganga water supply extensions, the Digital Terrestrial Television Broadcasting program, and development of rural infrastructure.
As electricity demand has doubled in the last two decades, the transmission project is both a technological upgrade and an investment in energy security strategy. It also fortifies Sri Lanka’s journey toward developing 70 percent of the power from renewable sources by 2030, as a means of securing its ability to absorb solar, wind, and hydro growth on the grid.
Through the reorganisation of programs and soliciting international goodwill, the government has transformed what began as a symbolic suggestion into a point of reversal of fortunes underscoring the fact that Sri Lanka is eager for partnership and progress.
