By: Staff Writer

June 29, Colombo (LNW): Consumers and investors across Sri Lanka have expressed growing concern over the potential implications of the recently passed Electricity (Amendment) Bill in Parliament.

Critics fear that the restructuring of the electricity sector could lead to privatization, higher tariffs, and reduced regulatory control. Amid this uncertainty, the Ministry of Power and Energy issued an official clarification on June 25, 2025, outlining the key provisions of the Amendment and addressing public apprehensions regarding the bill’s implementation and ownership changes.

According to the Ministry, the Government of Sri Lanka (GoSL) will retain 100% permanent ownership of both the newly established Generation and Distribution Companies as part of the initial transfer plan.

However, these entities will be further “unbundled” under Clauses 13 and 20 of the Bill. Notably, while GoSL’s permanent ownership is assured for the hydropower company, there is no legislative guarantee for full state ownership of the other unbundled entities — a point that has raised concern among stakeholders.

To address fears of re-bundling and lack of transparency, the Ministry emphasized that the new National Transmission and System Planning Company (NTNSP) will remain focused solely on transmission activities.

 NTNSP will, however, hold Ceylon Electricity Board’s (CEB) 35% stake in LTL Holdings Ltd. (LTLH) and 100% stake in Sri Lanka Energies Company Ltd. (SLEC) as valued assets, per the planned transfer. These holdings will not affect the NTNSP’s core role, though it may establish subsidiaries for other business interests.

Importantly, LTLH and SLEC—being separate entities—will not disrupt competitive electricity procurement, as all power plant operations will still require Power Purchase Agreements (PPAs) with the National System Operator (NSO), ensuring fair and transparent procurement under Section 11 of the existing Act.

The Ministry also clarified confusion surrounding Clause 20(4), which allows the Distribution Company to assume only the CEB’s 55% stake in Lanka Electricity Company Ltd. (LECO). This is not a full absorption of LECO, but merely a transfer of ownership. Both entities will continue to operate independently and maintain separate corporate identities.

Regarding market dynamics, the Amendment under Clause 18(2) facilitates the development of “Retail Markets,” aiming to provide consumers with more efficient and cost-effective electricity supply options. LECO is expected to benefit from this reform through expanded business opportunities and a broader consumer base.

To ensure tariff fairness, the final proposal—formulated by the Cabinet in consultation with the Ministry of Finance—confirms that tariff setting will remain under the purview of the national energy regulator, in alignment with national tariff policy.

In summary, while the Electricity Amendment Bill marks a significant structural reform in Sri Lanka’s power sector, the government insists it does not pave the way for privatization but rather enhances efficiency, transparency, and consumer choice. However, continued scrutiny from the public and industry observers is expected as implementation progresses.

By: Staff Writer

June 29, Colombo (LNW): Sri Lanka’s apparel industry, once a leading export sector and major foreign exchange earner, is currently grappling with a series of challenges, including reduced global demand, rising production costs, and stiff regional competition.

Exports have declined significantly in recent months, forcing many factories to scale down operations or temporarily shut down. Amidst this turbulence, some major players are looking overseas to diversify and sustain growth, while still retaining core operations in Sri Lanka.

In a bold move reflecting this strategy, Star Garments Group, a leading name in Sri Lanka’s apparel sector and part of U.S.-based Charles Komar and Sons, has officially launched its first overseas textile manufacturing facility in Togo, West Africa.

 The new plant, located at the Adétikopé Industrial Platform (PIA), was inaugurated in a ceremony led by Togo’s Council President Faure Gnassingbé, marking a historic milestone for both the company and the region’s emerging textile industry.

The 3.7-hectare state-of-the-art facility represents Star Garments’ first major manufacturing expansion beyond Sri Lanka, positioning Togo as a strategic hub for apparel production serving international markets.

While the new facility focuses on manufacturing, Sri Lanka will remain the company’s primary service and coordination center within its globally integrated operations.

The project is set to create 2,000 direct jobs in Togo, over 60% of which are designated for women, and is expected to generate more than 4,500 direct and indirect employment opportunities by 2030.

In addition to employment, the facility will implement extensive training programs to equip local workers with globally recognized manufacturing skills, aligning with Togo’s national industrial and development goals.

This is more than just a factory,” said Charlie Komar, CEO of Charles Komar & Sons. “It represents our long-term commitment to the people of Togo—creating jobs, providing training, and elevating global production standards with dignity and excellence. Togo was chosen for its strong focus on economic stability, infrastructure, and investment appeal.”

Togo’s Minister of Investment Promotion Manuella Santos highlighted the significance of the project, saying, “Star Garments’ decision to set up in Togo is a powerful vote of confidence in our industrial vision and development path.”

Once fully operational, the plant will produce 50,000 garments daily—focusing on nightwear, loungewear, and layered apparel—targeting global export markets.

Consistent with Star’s sustainability ethos, the Togo facility will adhere to stringent environmental practices and aim for LEED certification. It will also mirror the carbon-neutral operations that earned the company the Gold Award in the Extra-Large Textile and Garment Sector at the 2024 NCE Export Awards in Sri Lanka.

By: Staff Writer

June 29, Colombo (LNW): Sri Lanka’s tea export industry recorded a notable upswing in May 2025, with volumes rising 12.4% year-on-year to 21.87 million kilograms, according to the latest data. This surge pushed cumulative exports for the first five months (January–May) to 103.28 million kilograms, reflecting a 5.2% increase over the same period in 2024.

Export earnings also posted strong growth, with May earnings reaching US$ 131.81 million—a 14.58% rise compared to the same month last year. The average Free-on-Board (FOB) value per kilogram in May increased to Rs. 1,804.31, up Rs. 32.07 from Rs. 1,772.24 in May 2024. However, the FOB value for the cumulative five-month period slightly dropped to Rs. 1,756.46, marking a Rs. 15.87 decrease from Rs. 1,772.33 in the same period last year.

Positive export growth was seen across almost all tea categories for both the month of May and the January–May period, except for Bulk Tea and Tea Bags.

The final tea auction for the first half of the year, concluded this week (Sale No. 24), offered 6.5 million kilograms. Despite earlier concerns about market volatility due to the Iran-Israel conflict, market sentiment showed surprising resilience and price stability amid ceasefire speculation.

Ex-Estate offerings slightly decreased to 0.86 million kilograms. However, demand improved marginally, with select better-quality Westerns (BOP/BOPFs) fetching increases of up to Rs. 50 per kilogram. Coloury teas also saw gains between Rs. 20–40 per kilogram, although other varieties remained irregular in pricing.

Nuwara Eliya teas continued to struggle due to plainer quality, while Uda Pussellawa teas—especially those at the lower end—appreciated by Rs. 10–20 per kilogram. Uva teas with clean leaf BOP/BOPFs were firm and tended towards higher prices.

High and Mid Grown CTC PF1s showed barely steady performance among better teas, while the rest of the grades were erratic. BP1s remained in short supply. Low Grown CTC PF1s saw declines of Rs. 20 or more, particularly among lower quality teas.

The Low Growns, totaling around 2.5 million kilograms, experienced fair demand across Leafy, Semi-Leafy, and Tippy categories. Premium teas in this segment attracted significantly better prices.

In the Leafy and Semi-Leafy segments, Select Best and Best BOP1s held firm, though bolder varieties declined. OP1s were steady to dearer at the top end, while the rest showed a slight drop. OPAs generally remained stable. Among PEKs, top-end lots held firm, but mixed and open varieties saw easing prices. High-priced PEK1s dropped, but Best and Below Best grades appreciated slightly.

In the Tippy catalogue, some Select Best FBOPs held due to special demand, though most Best and Below Best varieties declined. Cleaner low-end teas held their ground, while others weakened. FF1s were mostly firm.

The Premium catalogue showed strong demand, especially for Very Tippy and Best categories, which were sold at notably higher prices, though lower-end teas remained mixed. Overall, Sri Lanka’s tea industry has shown resilience in exports and pricing despite fluctuating global conditions and mixed auction performance.

By: Staff Writer

June 29, Colombo (LNW): Sri Lanka’s largest ever foreign direct investment — a $3.7 billion oil refinery project in Hambantota by Chinese energy giant Sinopec — is facing delays due to unresolved issues between the government and the investor.

The project, which was formalized during President Anura Kumara Dissanayake’s state visit to Beijing earlier this year, remains stalled over key disagreements, notably on the share of refined fuel Sinopec will be allowed to sell in the domestic market.

The Chinese company has demanded unrestricted access to the local market for its products, while the Sri Lankan government has capped it at 20%.

According to a senior official at the Ministry of Power and Energy, who spoke on condition of anonymity, no final agreement has been reached regarding the local market share. However, he noted that discussions are ongoing, with hopes of resolving the matter soon to allow the project to commence.

Beyond the local sales issue, tax concessions and land allocation are also under negotiation. Sinopec has reportedly requested more land for potential expansion, and both parties are yet to finalize terms on the fiscal benefits the company will receive.

Additionally, concerns about the availability of adequate water resources in the Hambantota region have surfaced, raising questions about the long-term viability of refinery operations in the area.

Despite the hurdles, the government remains committed to moving the project forward. Officials maintain that while major issues like market access and tax terms are still under discussion, other matters such as land and regulatory frameworks are considered minor and can be addressed quickly.

Sinopec’s proposed oil refinery will have a daily processing capacity of 200,000 barrels, with a significant portion earmarked for export — a move that is expected to enhance Sri Lanka’s foreign exchange earnings. The project is also anticipated to provide an economic boost to the Hambantota region by creating jobs and improving local livelihoods.

However, the lack of progress over the past six months has raised concerns about the future of this high-profile investment and the broader implications for other Chinese-backed projects in Sri Lanka.

Professor Liu Zongyi, Senior Fellow and Director of the Centre for South Asian Studies at the Shanghai Institutes for International Studies, recently noted that Sinopec is facing serious challenges in executing the project.

The President’s Media Division has emphasized that the project’s benefits will eventually extend to the entire country, improving economic conditions and supporting development goals. For now, however, the ambitious refinery venture remains in limbo, pending resolution of the remaining disputes.