Sri Lanka has taken a step towards diversifying its renewable energy mix by approving a proposal to hire a consultancy firm to explore the feasibility of floating solar power projects, Cabinet Spokesman and Minister of Health and Media Nalinda Jayatissa announced. The move aims to accelerate the island nation’s goal of achieving 70 percent renewable energy by 2030 and complete carbon neutrality by 2050.

The initiative is part of the government’s Renewable Energy Resources Development Plan 2026–2030, which has identified several reservoirs suitable for generating an estimated 3,000 megawatts (MW) of electricity from floating solar installations. This estimate is based on using about 10 percent of the surface area of selected water bodies.

Minister Jayatissa noted that limited land availability has become a significant barrier to large-scale solar development, prompting the government to consider alternatives. “When you try to build solar panels on land, there is an issue of space because of limited land space. So, as an alternative, the government has focused on floating solar power panels,” he said.

Under the plan, potential sites will be selected only after pre-feasibility and feasibility studies, along with comprehensive environmental impact assessments. Tests are already underway in some water bodies, and findings from these pilots will inform future expansion.

Floating solar technology, while promising, presents both opportunities and challenges. Globally, such systems have been deployed in countries like China, India, and Japan, taking advantage of reduced land requirements, lower water evaporation rates, and potentially higher energy efficiency due to the cooling effect of water.

 In Sri Lanka, pilot attempts have been made on a small scale, particularly on reservoirs under the Ceylon Electricity Board (CEB) and irrigation schemes, but large-scale commercial deployment has yet to take off.

Key challenges include high initial capital costs and the need for robust battery storage systems to manage power fluctuations. The cost of energy storage remains a critical concern, as it can significantly impact the economic viability of these projects.

Cabinet approval paves the way for the procurement process to invite proposals from recognized firms to conduct technical and environmental studies. The consultancy work will determine the most suitable reservoirs, assess potential output, and address technical hurdles such as anchoring systems, maintenance in aquatic environments, and grid integration.

If implemented effectively, floating solar could become a cornerstone of Sri Lanka’s clean energy transition, complementing existing hydropower assets and reducing dependency on fossil fuels. The initiative also aligns with the country’s broader environmental goals, including plans for flora spatial mapping and participation in carbon credit trading.

However, experts caution that success will depend on transparent procurement, strong technical partnerships, and careful balancing of ecological and community concerns—especially in areas where reservoirs support fisheries and irrigation.

With feasibility work now set to begin, Sri Lanka’s push for floating solar could mark a turning point in its renewable energy journey, offering both climate and energy security benefits in the years ahead.

Sri Lanka’s monetary policy is currently well-calibrated but has room for interest rate cuts if an external shock — such as potential U.S. tariff hikes under former President Donald Trump’s proposals — impacts the economy, Central Bank Governor Dr. Nandalal Weerasinghe said.

Speaking at an “Invest Sri Lanka” forum in Singapore, jointly organised by the Colombo Stock Exchange (CSE) and the Securities and Exchange Commission (SEC), Dr. Weerasinghe said the policy interest rate of 7.75% translates into a real rate of about 2.75%, based on the 5% inflation target.

The Central Bank expects inflation to settle at its 5% target next year, with GDP growth close to 5% — well above the International Monetary Fund’s (IMF) forecast of 3%. “

This reflects the right balance in monetary policy,” he said. “If there’s an external event affecting us, we have the space to support the local economy. But without such a need, pushing rates down could create bubbles or boom-bust cycles.”

He noted that while there were concerns earlier this year when tariff hikes were first announced, the risk has eased. “We saw a risk in April, so we used our policy space very carefully,” he added.

Some analysts have warned that the recent rate cut could spur excessive private credit growth, boost imports from investment borrowing, and undermine foreign reserve accumulation. However, Dr. Weerasinghe expressed confidence in meeting the IMF’s year-end reserve target of around US$7 billion.

On trade, he said Sri Lanka’s competitiveness has not been significantly harmed as the proposed Trump tariffs have been reduced from 44% to 20%.

CSE Director and HNB Investment Bank Group CEO Ray Abeywardena also highlighted the benefits of Sri Lanka’s recent exchange rate stability. 

“Over the past year, the rupee has remained stable, supported by prudent policy, improved external performance, and steady inflows from foreign investment and tourism. This stability boosts investor confidence and gives predictability to businesses,” he told the forum.

Abeywardena added that fiscal consolidation, regulatory improvements, and stronger governance are reinforcing macroeconomic stability.

Sri Lanka’s current monetary stability stands in contrast to past policy cycles. Since 2022, the Central Bank has maintained a broadly deflationary stance, often undershooting its inflation target. 

In earlier years, rate cuts aimed at hitting the 5% target contributed to a series of currency crises in 2012, 2015-16, and 2019-22. These episodes triggered economic shocks, pushed up deficits, and caused losses at state-owned enterprises due to currency depreciation.

 Historically, Sri Lanka’s currency troubles date back decades. The rupee began depreciating in the 1980s, after the 1978 

Second Amendment to IMF Articles allowed more flexibility. Economists note that persistent depreciation and inflation have eroded the rupee’s role as a store of value and as a reliable medium of exchange for international trade.

The Central Bank’s early years also saw external instability. In 1952, policy loosening amid a global commodity boom led to external shocks and domestic unrest, while in 1949 a sharp rupee depreciation followed the UK’s post-war sterling crisis. 

Analysts say these episodes underline the risks of suppressing interest rates and the long-term importance of maintaining monetary discipline.

August 12, Colombo (LNW): The Constitutional Council has given its formal approval to President Anura Kumara Dissanayake’s nomination of Acting Inspector General of Police, Priyantha Weerasooriya, as the country’s 37th Inspector General of Police (IGP).

The decision was reached during a meeting held this afternoon, chaired by Speaker of Parliament Dr Jagath Wickramaratne. The appointment follows the removal of former IGP Deshabandu Tennakoon, whose tenure came to an end through a parliamentary resolution.

Weerasooriya’s rise to the top post is particularly noteworthy. He becomes the first individual in the 158-year history of the Sri Lanka Police to ascend from the entry-level rank of police constable to that of Inspector General—a feat that has been hailed as both unprecedented and inspirational within the ranks of the force.

A qualified lawyer and a graduate of the University of Colombo, Weerasooriya went on to earn a Bachelor’s degree in Business Administration, specialising in Human Resource Management. His career spans more than three and a half decades, during which he has held several key positions, including Director of Police Logistics and Deputy Inspector General overseeing Crime and Traffic operations. Prior to his elevation, he was serving as the Senior Deputy Inspector General for the North Central Province.

Throughout his service, Weerasooriya has received commendation letters from ten former IGPs, recognising his professionalism, leadership, and dedication. He has also served under the United Nations in peacekeeping missions in East Timor and Haiti, contributing to international policing and post-conflict stabilisation efforts.