Sri Lanka - Country Commercial Guide
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Total electricity generation registered a decline of 4.6 per cent in 2022, as a result of the disruptions to the coal and fuel imports needed for thermal power generation during the year. Accordingly, total power generation declined to 15,942 GWh in 2022, compared to 16,716 GWh in2021.

The country is planning to renew a 70 energy target by 2030.  The objective is to increase the power generation capacity of the country from the existing 4,043 megawatts (MW) to 6,900 MW by 2025 with a significant increase in renewable energy.  Sri Lanka has already achieved a grid connectivity of 98 percent, which is relatively high by South Asian standards.  However, the current economic crisis has affected all key segments of the economy, including the power sector. Electricity in Sri Lanka is generated using three primary sources:  thermal power (which includes coal and fuel oil), hydropower, and other non-conventional renewable energy sources (solar power and wind power). However, poor energy policies, failures to expand renewable energy and modernization of the transmission grid and lack of new power plants over the last decade has hindered the development electricity supply in the country.  Currently, the electricity sector reforms are underway and expected to be completed by end 2023 which will create more transparency and competitiveness that is expected to attract more renewable energy investment into the country.

The CEB’s base case plan for 2023 to 2042 includes development of a cumulative capacity of 6,925MW from renewable energy consisting of 4,705MW of solar, 1,825MW of wind power, 195MW of mini hydro and 200MW of biomass.  The annual total electricity demand is about 14,150 gigawatt hours (GWH).  The annual demand for electricity is expected to increase by 4.9 percent over the next 20 years, a number constrained by high prices. Currently CEB engineers estimates of shortage in base power is 300MW.  The CEB had commenced purchasing emergency thermal power to sustain supply.

 Sri Lanka experienced significant power outages in 2022 due to the economic crisis and lack of forex to purchase oil and coal to operate plants. Currently, the country is facing a severe drought which has reduced hydro power generation significantly and the power regulator has warned of impending power cuts if the water levels in the hydro power reservoirs do not improve.  A 300MW LNG combined cycle power plant in Kerewalapitiya – on the outskirts of the capital of Colombo – is under construction with plans for commissioning in 2024.  An ADB-sponsored study for an Indo/Sri Lanka grid connectivity is in its final stages and will provide financial and economic assessment and possible business models.  The current oil refinery is over 45 years old and urgently needs modernization to meet petroleum sector demand.  The electricity act was amended in June 2022 to fast-track renewable energy projects.

The Sri Lanka Sustainable Energy Authority (SLSEA) actively promotes all forms of renewable energy.  The government pledged in September 2021 to not build any new coal-fired power plants but may still seek to expand or upgrade existing plants.

Leading Sub-Sectors

Power Generation Plants


Opportunities in the power sector include:  wind and solar plants, LNG power plants, converting auto diesel-fired plants to dual fuel (liquid natural gas) plants, mini hydroelectricity plants, home solar systems, wind energy, electrical meters and switches, power transmission and control systems, and power cables. 

The Sri Lanka Sustainable Energy Authority (SLSEA) is actively promoting renewable energy options, and statistics reveal renewable energy contribution is steadily increasing.  Sri Lanka has vast solar-wind-energy resources due to its location in the Indian Ocean.  Eleven wind power plants are currently connected to the national grid.  USAID has assessed wind and solar energy potential for Sri Lanka.  This information is available at


Ceylon Electricity Board (CEB)