The Hon. Ravi Karunanayake

¶ 01 Hon. Speaker, I raise the following regarding a major recent issue: renewable energy.

¶ 02 Sri Lanka initiated a new renewable energy policy with a strong vision to move to an environmentally friendly and stable energy mix, attracting bankable finance and private investment for solar and wind projects under a feed-in tariff (FIT) framework.

¶ 03 Now, the CEB has arbitrarily reduced FIT rates. These changes affect projects already at investment, bank financing and contracting stages.

¶ 04 Key consequences: 1. Investor confidence is breaking down due to unilateral reductions without due consultation. 2. Bank lending is constrained by regulatory uncertainty. 3. Negative market sentiment contradicts stated policy, sending a bad signal to the private sector. 4. Policy credibility is damaged; reversals affect domestic and international investors.

¶ 05 This harms domestic stakeholders most. Therefore, Hon. Minister, please inform:

¶ 06 1. The Government has stated a vision of 70 per cent renewable electricity by 2030, which boosted investment and bank financing. Is this reversal and the Electricity Act amendments contrary to that vision? 2. What are the specific reasons for reducing FITs for solar and wind projects? Was the adverse impact on investor confidence and project bankability considered? Wind is firm generation; solar becomes firm with batteries—duties were removed, but now production costs are rising. 3. Before making these changes, was any stakeholder consultation conducted on: - Viability of ongoing and developing projects, - Bank lending risk management, - Sri Lanka’s energy security and climate goals, and - Foreign exchange outflows for fuel imports? 4. Will you reconsider and establish a transparent, stable pricing formula to restore investor confidence? 5. Do you accept that removal of tax concessions on lithium-ion batteries essential for storage has greatly increased project capex, making projects non-viable at the CEB’s Rs. 45.80 rate? Even VAT and import charges now push LCOE beyond Rs. 60. 6. Considering national renewable ambitions, will the Government restore concessions for batteries and other storage technologies to firm up supply and enable bankable renewables?

¶ 07 Thank you.