Sri Lanka has signed the loan and grant agreements for a roughly US$57 million clean energy package that will introduce virtual net metering to the country for the first time and modernise the distribution networks of two state-owned utilities.
The agreements were signed at the General Treasury in Colombo on 1 October by Finance Ministry Secretary Dr Harshana Suriyapperuma and Shannon Cowlin, the Asian Development Bank’s Country Director for Sri Lanka, Hiru News reported.
What the package contains
The financing combines a US$35 million concessional loan from the ADB with two grants: €15.4 million from the European Union, worth about US$16.94 million, and US$5.5 million from Japan’s Joint Crediting Mechanism Fund. Together the three components come to roughly US$57 million.
The project will run from 2026 to 2030 and will be implemented by the Ministry of Energy together with Electricity Distribution Lanka and the Lanka Electricity Company.
Virtual net metering, for the first time
The central novelty is virtual net metering, which Sri Lanka has not previously operated. Under the model, electricity generated by large rooftop solar installations is pooled and the credits distributed to eligible consumers — allowing customers to take the benefit of solar power without panels on their own roofs. The project plans 25 megawatts of aggregated rooftop capacity, directed at small and medium-sized businesses.
Alongside it, the two utilities will roll out smart meters, advanced metering and distribution management systems, which the project expects to improve grid reliability and shorten restoration times after outages. Battery storage and upgraded distribution infrastructure are intended to raise the network’s capacity to absorb renewable generation.
Negombo is singled out for particular attention, where the work is expected to strengthen the local network, support new commercial and industrial connections, and improve the flexibility of supply.
Three stages, one project
The signing is the final step in a sequence that has run for most of the year, and the stages are easy to confuse. The ADB board approved the financing in late June; the Cabinet cleared the loan and grant agreements in mid-July, as LankaNewz reported at the time; the agreements have now been executed at the Treasury. The figures have remained consistent across all three stages.
At the time of writing, Hiru News was the only verified newsroom to have filed on the 1 October signing; searches of other Sri Lankan outlets returned only the June approval and July Cabinet stages.
