ADB Approves $57.4M for Sri Lanka’s Solar Power Expansion

COLOMBO (News 1st);  The Asian Development Bank (ADB) has approved a $57.4 million financing package to support Sri Lanka’s efforts to expand access to affordable clean energy and reduce greenhouse gas emissions through an ambitious rooftop solar aggregation and virtual net metering initiative.

The financing package includes a $35 million concessional loan, $16.9 million in grants from the European Union, and $5.5 million from the Japan Fund for the Joint Crediting Mechanism. With additional counterpart funding from implementing agencies, the total estimated project cost stands at $80.5 million.

The Rooftop Solar Aggregation and Virtual Net Metering Project will enable two government-owned utilities, Electricity Distribution Lanka (Private) Limited and Lanka Electricity Company (Private) Limited, to roll out a scalable model that pools electricity generated from large rooftop solar systems and redistributes it virtually to eligible consumers.

This model allows multiple users to benefit from solar power without the need to install rooftop panels individually.

ADB Country Director for Sri Lanka, Shannon Cowlin, said the project will significantly widen access to affordable renewable energy while improving the resilience and inclusiveness of the country's power sector.

She added that the initiative will also contribute to grid modernization and digital transformation, while supporting small businesses and creating new employment opportunities, particularly for women and youth in the clean energy sector.

The project is expected to directly benefit micro, small, and medium enterprises as well as community organizations, especially those unable to install rooftop solar systems due to financial or spatial limitations.

Through a social compensation mechanism, eligible groups will gain access to electricity cost reductions under the virtual net metering system.

Approximately 25 megawatt-peak of rooftop solar installations will be supported under the project. In addition to promoting renewable energy generation, the initiative will strengthen distribution networks, enhance digital capabilities, and prepare the national grid to accommodate increased levels of distributed renewable energy.

The project also includes the establishment of a dedicated training facility aimed at developing green skills, boosting women’s participation in the sector, and building technical capacity in advanced low-carbon technologies.