In a significant policy shift to drive renewable energy and sustainable industrial growth, the Government has introduced new regulations granting duty and tax exemptions on the import and local purchase of capital goods used in priority development projects.
The regulation, issued by Finance, Planning and Economic Development Minister Anura Kumara Dissanayake under Section 101(1) of the Customs Ordinance, was gazetted this week and will take effect on 15 October 2025. It updates the 2018 framework to include renewable energy storage among the eligible sectors under the bonded warehouse facility a move expected to accelerate investment in clean energy infrastructure.
Under the revised rules, companies registered for approved projects in five key industries—dairy manufacturing, pharmaceutical production, medical equipment manufacturing, solid waste management, and renewable energy generation or storage can now import or purchase capital goods free from selected duties and taxes.
To qualify, renewable energy projects must involve either the construction of new facilities or expansion of existing ones with at least 1 megawatt (MW) of generation capacity or 1 megawatt-hour (MWh) of storage capacity.
The amendment replaces sections of the 2018 Gazette (No. 2083/33), broadening the incentive scheme beyond manufacturing to include environmental management and clean energy sectors. This marks a strategic shift in Sri Lanka’s economic vision, aligning with its 2026 development roadmap that emphasizes energy security, sustainability, and industrial innovation.
Economists and industry analysts view the regulation as a timely intervention that could attract both local and foreign investors into Sri Lanka’s green economy. With global investors increasingly prioritizing low-carbon ventures, the new policy could enhance the country’s competitiveness in renewable energy and waste management.
Experts also note that the initiative supports the Government’s national target of generating 70% of electricity from renewable sources by 2030, while reducing dependence on imported fossil fuels.
“The inclusion of energy storage is particularly crucial,” an energy sector analyst noted. “It shows policymakers are thinking beyond generation to grid stability and long-term energy resilience.
”The regulation, therefore, represents more than a fiscal adjustment it signals a broader commitment to transforming Sri Lanka’s energy and industrial base through innovation, sustainability, and investment confidence.
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