By: Staff Writer

Colombo (LNW): Ontario-based American Clean Energy Solutions Inc. is set to invest US$150 million to develop a 100MW ground mounted solar power project in Nilaweli with its local partner 3W Power Management Limited.

American Clean Energy Solutions Inc. recently secured the energy permit approval clearance from Sri Lanka Sustainable Energy Authority (SEA).

Last August, Sri Lanka Broadcasting Corporation (SLBC) awarded the contract to 3W Power Management Ltd in Trincomalee to develop a solar farm.

The land was earlier used by Deutshe Welle (DW), which closed down its shortwave relay station in 2011 and was handed over to the SLBC.

3W Power Management Limited’s Head of Business Development Indika Kumara Weerakkody shared that US$ 40 million would be invested in a battery storage unit which will enable an uninterrupted power supply to the grid.

The project is expected to save approximately Rs.8 billion per annum to the Ceylon Electricity Board by replacing the high-cost thermal power.

The project was realised following one and half years of effort which included a six-month environment feasibility study. As the next step, the developer is in discussions with the CEB to enter into a power purchasing agreement.

Weerakkody noted that the Canadian investor has also expressed interest in investing in some of other power projects including waste-to-energy.

American Clean Energy Solutions Inc. is a privately held company engaged in waste-to-energy, solar farm park, and water business ventures

The SLBC recently awarded the Energy Permit Approval clearance letter received from Sri Lanka Sustainable Energy Authority (SES) to the Canadian Investor.

Regional Director of the American Clean Energy Solutions Inc., Mohamed Hussain received the award letter from SLBC Chairman. Hudson Samarasinghe in the presence of Minister of Transport, Highways and Mass Media Bandula Gunawardana; Secretary, Ministry of Mass Media; Anusha Pelpita, Chairman SEA, Eng. Ranjith Sepala, Director General of SLBC Nalin Kumara Nissanka and Director General J.M Athula.

Chief Guest Minister Bandula Gunawardana said that Sri Lanka should attract more foreign direct investments to come out from the present economic crisis.

He invited all investors to provide required support to develop the Renewable Energy drive of Sri Lanka and appreciated the efforts made by 3 W Power Management Limited Executive Director/Vice President Indika Kumara Weerakkody and Executive Director/General Manager Warnapriya Wijesundara.

The Minister said that it is essential to initiate new business opportunities to bring FDIs to Sri Lanka.

Nilaveli Solar project has been planned to develop on an unutilized land extent that belongs to SLBC and generate additional income to the SLBC.

Minister also pointed out the enormous benefits from this solar power project as it reduces the requirement of fossil fuels to generate electricity.

It was informed that the project will save approximately Rs. 8,000 million per annum to CEB by replacing the high-cost thermal power.

Vice President of the 3 W Power Management Limited Mr. Weerakkody appreciated the support received from all the government officials such as Kuchchaveli Divisional Secretary, CEB, SEA, CEA and especially SLBC during the initial approval process of the project.

By: Staff Writer

Colombo (LNW): The International Monetary Fund is encouraging the authorities to continue to build on hard-won gains in respect of sustaining the reform momentum and further advance revenue mobilization.

The revenue mobilization measures such as energy pricing with costs, strengthen social safety nets, rebuild external buffers, safeguard financial stability, combat corruption and enhance governance are now in progress in the country. Senior IMF Mission Chief for Sri Lanka Peter Breuer disclosed.

Reenforcing the revenue-based fiscal consolidation with revenue administration reforms is critical to recover from program slippages and to fund the provision of essential government services.

The Central Bank of Sri Lanka continues to focus on the multi-pronged disinflation strategy to safeguard the credibility of its inflation targeting regime.

Accumulating reserves, supported by exchange rate flexibility, remains an important priority under the EFF. Implementing the bank recapitalization plan and strengthening the financial supervision and crisis management frameworks are crucial to safeguarding financial sector stability, he emphasised.

He noted that the IMF encourages the government authorities to remain steadfast on their reform commitments.

IMF financing is provided as budget support and it’s up to the government of how they allocate those funds and where they go to.

In principle,it helps the government in terms of bringing in foreign exchange in to Sri Lanka. The IMF has allocated about 6% of GDP in terms of bank recapitalization and the size of the current tranche that’s provided following the board meeting today is about .5% of GDP.

Sri Lanka’s exchange rate appreciated by about 25% from March until end May this year. Since then, it has seen some depreciation of the scale of 10% over the summer

As a counterpart the central bank has built up foreign exchange reserve quite strongly in the first half of the year.

Since then, reserve accumulation slowed over the summer and now it’s picking up again. Going forward, there’s a need to continue to build in reserve. But the central bank and to allow the exchange rate to be fairly slow down, limiting interventions only to disorderly market conditions.

IMF representatives noted that putting public finances on a sustainable footing is a very important part of the IMF program.

And therefore, at the very beginning of the program, we had to look into cost reflective pricing on electricity and fuel. And this continues to be a continuous structural benchmark under the program.

Also, in the spirit of putting a series on a sustainable footing, one of our structural benchmarks was for the authorities to come up with a strategy of the rebalancing of the city’s balance sheet.

Sri Lankan Airlines, Ceylon Petroleum Corporation, Ceylon Electricity Board and the Road Development Authority are now under the process of rebalancing of balance sheets.

By: Staff Writer

Colombo (LNW): The government’s unprecedented VAT hike is noy only challenging for authorized mobile phone importers but also encouraging parallel imports, or grey market in the country.

Thse illicit racketeers involve the import and sale of branded products in a market without the trademark owner’s consent.

This issue has already caused a tax revenue loss of Rs 3.1 billion (USD 9.4 million) and a Forex outflow of Rs 31.6 billion (USD 96 million) via illegal channels in Sri Lanka.

With the sudden VAT increase, this loss is estimated to rise to Rs.11.9 billion marking a substantial increase in tax revenue loss from illegal imports, mobile hand set importers disclosed.

Additionally, there is a projected further tax revenue loss to the government, amounting to a Rs 2.5 billion decline from legitimate imports. This decline is anticipated due to increased parallel import products driven by the rising prices of genuine products, they added.

Under this critical set up a group of authorized mobile phone importers in Sri Lanka express their deep concern over the Sri Lankan government’s decision to remove mobile phones from the Value Added Tax (VAT) exemptions list, coupled with a simultaneous increase in VAT from 15% to 18%, effective January 1st, 2024.

This dual impact, wherein devices now not only face a sudden VAT imposition, but also at a significant rate of 18%, pose substantial challenges for the industry and the country. The importers urgently call for a critical reassessment by the authorities in light of these compounded challenges.

Moreover, the ramifications extend beyond the economic landscape. Over 10,000 direct job opportunities are now at risk, leaving families dependent on the industry—more than 15,000, including those involved in logistics, printing, branding, advertising, etc.—facing uncertainty.

The policy change also jeopardizes direct Forex investment for market development by principals (ATL/BTL), putting this crucial financial support at risk.

Furthermore, the spectre of a national security threat looms as parallel imports introduce unknown devices to the country, creating challenges in tracking these products.

Authorized mobile importers emphasize the unfortunate timing of removing cellular and electronic devices from the VAT-exempted list and the hike in VAT given the ongoing efforts by legal importers to find solutions for the persistent Parallel Imports (PI) issue.

Accordingly, the industry has put forward practical suggestions and is actively engaged in collaboration with the TRCSL to explore viable solutions .

These solutions include proposing an option for registering already in-use PI devices at a nominal fee, introducing a Tourist SIM for the duration of the incoming visitor’s VISA period, and implementing whitelisting of non-registered IMEI from mobile networks.

These initiatives aim to holistically address the challenges posed by parallel imports, foster regulatory compliance, and contribute to the development of effective policies that strike a balance between industry interests and regulatory requirements.