President Anura Kumara Dissanayake has announced a series of major investments to strengthen Sri Lanka’s energy security, including upgrades to the national electricity grid, improvements to fuel infrastructure and measures to encourage renewable energy adoption.
Delivering the 2027 Budget speech in Parliament, the President said nationwide power outages experienced in February 2025 and October 2026 had exposed weaknesses in the country’s electricity network.
He said instability in the national grid had contributed to both incidents, highlighting the need to improve its stability and prevent similar disruptions in the future.
Accordingly, the Government will invest Rs. 26.5 billion to upgrade and reinforce the national electricity network, with the aim of improving the security and reliability of the power supply.
A new electricity transmission line connecting Kilinochchi and Habarana is also planned as part of the initiative.
Incentives for battery storage and smart meters
The President announced a Rs. 3.5 billion relief package to encourage rooftop solar users to install battery storage systems.
Under the proposal, new domestic rooftop solar customers will receive a subsidy of Rs. 25,000 for each 1kW of battery storage capacity installed. The incentive will cover systems of up to 10kW, allowing eligible households to receive a maximum subsidy of Rs. 250,000.
The Government also plans to install a 30-megawatt battery storage system at the Norochcholai Power Plant.
Meanwhile, 300,000 electricity consumers using more than 180 units per month will receive free smart meters. All Lanka Electricity Company (LECO) consumers using more than 120 units per month will also be provided with smart meters under the programme.
In another measure aimed at reducing renewable energy investment costs, the Government will remove the 10 per cent Port and Airport Development Levy (PAL) imposed on imported solar batteries.
Dissanayake said the tax concession would provide further savings for households, estimating that removing the levy would reduce the cost of a 1kW battery by approximately Rs. 4,000.
Investments in fuel infrastructure and storage
The President also outlined several projects to improve fuel transportation, unloading and storage facilities.
The Government has called for bids for a Rs. 16.3 billion pipeline project connecting the Port of Colombo with Kolonnawa to improve fuel unloading efficiency.
The project is expected to reduce the unloading time of a 90,000-metric-tonne fuel vessel from 96 hours to 48 hours, helping minimise additional costs caused by delays.
According to the President, each day of delay costs approximately USD 30,000, meaning the project could save up to USD 60,000 per shipment in demurrage charges.
The Government also plans to increase the country’s fuel storage capacity to cover 45 days.
In addition, Rs. 22.34 billion has been allocated for a project to construct a jet fuel pipeline from Muthurajawela to Bandaranaike International Airport (BIA) and develop fuel storage facilities with a capacity of 92,000 metric tonnes.
The measures form part of the Government’s broader strategy to strengthen energy security, improve electricity supply reliability, enhance fuel distribution and promote the use of renewable energy.
