The Hon. Wasantha Samarasinghe - Minister of Trade, Commerce, Food Security and Cooperative Development

¶ 01 Hon. Presiding Member, today’s Budget debate on the energy sector has centered on the CEB and CPC. We observed both progressive ideas to overcome the sector’s crises and, by some, the same old narratives. We will take on board the progressive proposals and reject untruths, and conclude this debate.

¶ 02 About 100 days have passed since the general election brought the NPP Government to office; we have been working on the energy sector for roughly five months since the President assumed office. We have taken steps to minimize the fraud, corruption, and waste embedded in this sector. Our greatest challenge over the next five years is to eliminate corruption and ensure these institutions deliver benefits to the people. Organised arrangements have long entangled suppliers, private plants, and fuel distributors. We are dismantling and reforming those linkages; problems will arise in the process, and we are ready to face them.

¶ 03 Regarding rooftop solar, yes—there have been capacity and grid-integration constraints, and delays in responses. Our Ministers have identified these and taken decisions to rectify matters quickly. As a Government, we have stated we can produce about 3,200 MW on 10,000 acres for solar, and are proceeding to identify lands. With rising national production and industrialization, the current 4,000 MW demand could double by around 2028. Therefore, we must expand renewable generation accordingly, and that is what we are doing.

¶ 04 On the fuel dealer discount issue: while allowing a margin from fuel sale profits is acceptable, there have also been tax waivers. There is a standard tax per litre; discounts have been given even from those taxes. These must be corrected. Our proposals follow existing laws and court guidance. We reiterate: there is no countrywide fuel shortage. The Government has ensured continuous supply. The dealers’ issues can be resolved through discussions with CPC officials. We will not allow any situation to deteriorate into scarcity; any short-term inconvenience to consumers will be addressed swiftly.

¶ 05 On power: under our Government, the lowest-ever wind tariff—USD 4.65 cents/kWh for a 50 MW project—was achieved through proper intervention. Some made allegations and even went to court but withdrew their cases; claims of “a phone call from the Secretary” are baseless. We will deliver the lowest-cost power to the people.

¶ 06 On solar, the Sampur project achieved USD 5.97 cents/kWh—the lowest solar price to date under our Government. These outcomes result from Government intervention to reduce costs so that we can, in turn, reduce bills.

¶ 07 Energy policy was never implemented in time. Over the past two years, with professionals, we have prepared a policy framework and about 30 measures that the CEB will gazette within the next two weeks. We are acting on policy and will table what is required. Those who doubt will see the results.

¶ 08 We also plan to bring necessary legislation within 2025. We categorically state: under an NPP Government, we will not privatize generation, transmission, or distribution. We are drafting a new Electricity Act to reunify functions that were being fragmented into 12 companies. We will consolidate into five functional components (including transmission and distribution) within the CEB and bring amendments to strengthen the institution. We expect to table the Bill by April/May. We are reversing prior attempts to break up and privatize, and instead building a stable, uninterrupted, and low-cost power system—necessary for exports and reducing production costs.

¶ 09 In general, 70–80% of electricity costs are generation costs. We cannot build plants in five months, but in five months we took measures to reduce prices in forthcoming projects—lowering solar and wind tariffs under competitive procurement, and planning tenders for storage as well. Previously, a solar kWh cost around Rs. 37.50; we have brought it down toward Rs. 18–20. Even for household rooftop solar, we are rationalizing tariffs and lowering unit costs to enable consumer benefits. We have engaged with ADB, World Bank, JICA and other development partners; under ADB, we are moving to commence a USD 200 million transmission and distribution program. We will not allow the sector to collapse or deny public services.

¶ 10 On rooftop solar delays—grid capacity, connection delays of two to three months—we will resolve these expeditiously. Solar is a resource; we will harness it. For large solar, we will include batteries, moving to solar-plus-storage so daytime energy can serve night needs, and we will pursue alternative storage pathways.

¶ 11 We also reinstated 70 CEB employees who were suspended for union actions intended to protect the institution; court cases against them were withdrawn. In five months we have acted to safeguard workers and the sector. We will reduce electricity and fuel prices through systemic measures, while ensuring continuity of essential services. We welcome Opposition proposals that can help. We will not accept a return to “old ways.” With leadership from the President, Cabinet, Minister and Deputy Minister, we will solve the sector’s problems and ensure uninterrupted supply to the people.

¶ 12 Thank you.