ADB $300M Loan For Clean Energy
The Asian Development Bank (ADB) and the Government of Sri Lanka on Thursday signed the first tranche loan agreement of a two-part $300 million loan to scale up use of clean energy and cut the country’s reliance on costly petroleum oil for electricity generation.
“The use of expensive oil-fired thermal plants to meet the growing demand is not a viable and sustainable solution for energy security and environment protection in the long term,” said Sri Widowati, ADB’s Country Director in Sri Lanka. “Diversification of the generation mix primarily to renewable energy sources will have major benefits both for poor communities and the broader economy.”
Witnessed by ADB’s Vice President Wencai Zhang, Ms. Widowati signed the loan on behalf of ADB while P. B. Jayasundera, Secretary to the Treasury, Ministry of Finance and Planning, signed for the Government of Sri Lanka.
The program supports Sri Lanka’s wider energy investment road map, including its plan to increase the share of grid power generated from nonconventional renewable energy sources, such as mini-hydropower, wind power, and solar power, to 20% of the total by 2020. The improved transmission system is expected to boost access to reliable power for about 300,000 customers in rural areas and small towns who currently suffer from low quality supplies.
The first $150 million tranche will finance a 30-megawatt (MW), run-of-the-river hydropower plant at Moragolla in Central Province and expand and upgrade transmission lines and other infrastructure in needy areas, including the former conflict-affected Northern and Eastern Provinces.
The hydropower plant will generate an additional 97.7 million units of hydropower for the grid, saving about 72,300 tons of carbon dioxide (CO2) emissions every year while improved transmission lines will further reduce annual CO2 emissions by 98,400 tons.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2013, ADB assistance totaled $21.0 billion, including co-financing of $6.6 billion.