ADB halts funding for rooftop solar power generation project

27 August 2022 08:44 am Views - 6041

• Project halted following request made by govt. to repurpose funding for more urgent projects
• ADB was expected to provide a further funding of US $ 250mn for project
• CEB must come up with a more realistic feed-in tariff structure for rooftop solar producer to relaunch programme
• SIA calls on govt. to embark on an ambitious target of adding 1GW of solar rooftops per year for next three years 

By Nishel Fernando
The Asian Development Bank (ADB) halted funding for the Rooftop Solar Power Generation Project in Sri Lanka, which was aimed at increasing solar power generation and fast-tracking the implementation of the government’s Battle for Solar Energy programme. 

Responding to a media query, Solar Industries Association (SIA) Secretary Lakmal Fernando revealed that the project has been halted by the ADB following a request by the government to repurpose the funding for more urgent projects amidst the ongoing economic crisis.  The ADB has disbursed US $ 50 million in funds to refinance the loans granted by 10 participating financial institutions to electricity customers. 

Under the project, the ADB, through the participating financial institutions, had provided loans at a 4 percent interest rate p.a. repayable in 10 years to finance up to 50Kw rooftop solar systems per customer. 
According to Fernando, the ADB was expected to provide a further US $ 250 million in funding for the project. 
Although Sri Lanka could apply for a new credit line from the ADB to relaunch the project, he stressed that the Ceylon Electricity Board (CEB) needs to come up with a much more realistic feed-in tariff structure for rooftop solar producers. 

 “Even the ADB won’t offer any new credit lines under the existing feed-in tariff structure,” he added.  The SIA has proposed the government to relaunch the Battle for Solar Energy programme with a much more ambitious target to add 1GW of solar rooftops per year for the next three years.  

So far, the government has positively responded to the SIAs’ proposals, Fernando said. 
A sum of US $ 50 million is earmarked for refinancing of loans granted by the participating financial institutions to electricity customers. 

To increase solar power generation and speed up the implementation of the Battle for Solar Energy programme, the government of Sri Lanka has requested the ADB to provide a credit line. The facility would enable institutional and domestic customers to finance the installation of solar rooftop PV generation facilities.