Long-term political will crucial for SL’s power sector reforms: ADB

By Nuzla Rizkiya

The success of Sri Lanka’s power sector reforms depends heavily on the government’s ability to maintain strong political will over the long term, according to Asian Development Bank (ADB) Country Director Takafumi Kadono.

Highlighting issues such as lack of transparency, high generation costs and potential overstaffing at the Ceylon Electricity Board (CEB), Kadono said Sri Lanka needs a clearer understanding of its power sector reform objectives, especially compared with the other countries in the region.

“In the case of the CEB, these are the areas that need to be addressed. We need to be clear about the objectives we want to achieve and have a solid plan. 

We cannot undertake these reforms or the broader economic structural reforms, including the state-owned enterprise (SOE) reforms, without political will,” Kadono said at a recent Advocata conference.

“It’s going to be a long journey but we must sustain political will because, without it, we will not reach our final objective,” he added.

Kadono emphasised that the public should understand that the power sector reforms are not necessarily about privatising state-owned enterprises.

Sri Lankan citizens generally support reform processes, as there seems to be a broad understanding of the importance of the SOEs in the context of overall economic structural reform.

“In the power sector, we’re not talking about privatisation. It’s a power sector reform unbundling process. I believe there is support from the public for reforms in general. In terms of SOEs, people feel that something needs to change,” Kadono said.

While privatisation might be part of the broader reform agenda in the power sector, Kadono noted that the focus should be on unbundling and attracting private investment, particularly in the renewable energy sector.

“Maybe in the future, there could be some divestment, such as if the distribution companies are unbundled, which could attract the private sector investment. So, by implementing these reforms—not necessarily privatisation per se—we can make the industry more vibrant and competitive, bringing in the necessary investment from both domestic and foreign investors,” Kadono asserted.