IMF Mission Chief for Sri Lanka Evan Papageorgiou has identified coal quality issues as a key driver of higher power generation costs in the country, adding international scrutiny to a domestic crisis that triggered a no-confidence motion against the Energy Minister.
Speaking at a press briefing following the conclusion of the IMF’s 5th and 6th reviews on Friday, Papageorgiou flagged the coal procurement failures that have plagued the Norochcholai power plant as a contributor to Sri Lanka’s elevated electricity costs.
The remarks add external validation to the findings of the COPE audit, which documented irregularities in coal imports spanning multiple administrations, and an independent coal quality assessment that estimated Rs. 2.24 billion in efficiency losses.
The IMF’s intervention on coal quality is significant because the Fund has simultaneously pushed for a tariff resubmission by June to bring electricity pricing in line with costs. If coal procurement continues to inflate costs, consumers face higher tariffs regardless of the ongoing tariff shock debate.
On the same day, Minister Nalinda Jayatissa told Parliament the government is considering appointing an independent investigation committee to examine coal procurement spanning more than 15 years. President Dissanayake had already acknowledged substandard coal imports in Parliament on April 7.
The IMF’s $700 million tranche under the Extended Fund Facility remains on track for board approval, with the next tariff filing expected in Q2.
