In the wake of government’s extension of US$100 million credit line for rooftop solar countrywide, the sustainable energy sector warned of bankruptcy due to the non-payment of Rs. 35 billion in dues by the Ceylon Electricity Board.
Employees in the sector yesterday staged yet another protest in Colombo demanding immediate settlement of dues.
Power and Energy Minister Kanchana Wijesekara said a $ 100 million credit line extended by the Indian Government for rooftop solar will be utilized to equip several State-owned buildings for power generation.
He made these remarks following a progress review meeting held on Saturday. The meeting was attended by officials from the Indian High Commission State Minister D.V. Chanaka, the Ceylon Electricity Board and the Sustainable Energy Authority of Sri Lanka.
Schools, universities, education institutes, hospitals, districts, Divisional Secretariats, Government buildings and religious institutes will be equipped with rooftop solar, utilizing the Indian credit line, the Minister said via Twitter on Saturday.
The sector accounts for 13% of the country’s energy supply. However protesters told the media it was said that even though there was an agreement to settle the dues it has only remained on paper.
As the power is supplied to the grid at far below the selling price and for which the monies have been collected by the CEB from its customers giving a very high profit. Despite this fact of having collected the money for the power supplied the CEB still does not pay the dues to the sustainable energy suppliers.
They warned that further delay in payment would lead to the collapse of sustainable energy industry leading to job losses and investments jeopardizing cost-efficient future power supply.
Holding the maiden press conference of the newly formed Federation of Renewable Energy Developers (FRED), the association’s President Thusitha Peiris yesterday revealed that the grid-connected private sector renewable energy developers are struggling to continue operations of their power plants due to severe cash-flow shortages with the CEB failing to settle Rs.35.1 billion worth of invoices owed to them over past 10 months.
With a 1, 350MW installed capacity, private sector renewable energy players currently contribute to around 14 percent of the country’s power generation.
The payments to private sector-owned renewable power sector only amounts to 5 percent of CEB’s overall power generation cost, whereas 74 percent of the cost is incurred to import diesel and heavy fuels.
Past President of Small Hydro Power Developers Association Prabath Wickramasinghe noted that renewable energy sector’s annual contribution has come down by 60GWH, which has led to Rs.5.35 billion net loss for CEB as CEB is forced to rely more on expensive imported power generation sources such as diesel to meet the shortfall.
As a result of severe cash flow issues, renewable energy developers are now struggling to service around Rs.60 billion project loans with the country’s banking sector with most of the loans classified as non-performing.
As a result, banking and other financial entitles now tend to recognize investments in renewable energy sector as high-risk, which could substantially slow down the country’s renewable energy activities in years to come.
