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President Ranil Wickremesinghe has highlighted the present as an opportune moment for investing in Sri Lanka’s renewable energy sector.

The President has expressed confidence in Sri Lanka’s renewable energy sector’s potential to yield substantial benefits for both stakeholders and consumers in the coming decades.

He further underscored that investors venturing into this sector can anticipate a comprehensive and unwavering policy framework in the realm of renewable energy.

President Ranil Wickremesinghe made these remarks during his address at the “Green Technology Forum”, coordinated by the Swiss-Asian Chamber of Commerce, which was convened on Monday (Jan 15) in Davos, Switzerland.

Speaking on the theme of “Paving the way to an energy secure Sri Lanka,” President Ranil Wickremesinghe highlighted the substantial potential of Sri Lanka’s renewable energy sector. He further outlined the government’s initiatives over the past two years to establish an investment-friendly environment in the renewable energy sector.

Emphasizing Sri Lanka’s dedication to addressing climate change, President Ranil Wickremesinghe elaborated on various measures, including the “Tropical Belt Initiative,” presented at the COP28 conference in Dubai.

Highlighting Sri Lanka’s commitment to sustainable and green development, the President emphasized the nation’s ambitious plans and determination to achieve net-zero emissions by 2050.

President Ranil Wickremesinghe underscored the pivotal role of the rapid renewable energy plan, describing it as a key component of Sri Lanka’s comprehensive efforts towards sustainable development and a crucial step in ensuring energy security.

Following is the full speech delivered by President Ranil Wickremesinghe at the Green Technology Forum in Davos, Switzerland.

I thank the Swiss Asian Chamber of Commerce and their partners in organising this event for the invitation to speak today.

Background: Green Energy and Climate Concerns

There is an urgent need for acceleration of global actions towards climate change mitigation. There have been multiple global forums which have resulted in numerous commitments towards this end. However, actions have fallen drastically short of commitments.

The fallout of this failure in global leadership is borne largely by developing nations of the global south. When periods of drought extend beyond normal, undermining agricultural production, our food security is in jeopardy. When hydropower gets disrupted due to delayed monsoons, our energy security is in jeopardy. Droughts are often followed by a deluge, leading to flash floods and landslides, disrupting lives and livelihoods of under-privileged communities in particular.

It is very evident that there is a disproportionate impact of the adverse outcomes of climate change on developing countries. This brings to light the issue of climate justice and the need for a stronger contribution from the advanced economies towards adaptation and mitigation efforts in the global south.

That being said, Sri Lanka will forge ahead with its efforts towards climate mitigation. We have also recently launched the Tropical Belt Initiative at the COP28 in Dubai – this creates a framework for catalysing private investment in forests, energy, oceans, mangroves, in the countries of the tropical belt.

Today I want to focus on one key aspect of such efforts, which is our drive towards renewable energy.

Renewable Energy in Sri Lanka: Building on History

In fact, Sri Lanka is a country with a long history of renewable energy. Since independence Sri Lanka developed an extensive network of hydropower, commissioning its first major hydro-power plant in 1950. Hydropower was able to provide for most of the country’s energy needs until the 1990s. Even today, hydropower accounts for around 40% of Sri Lanka’s installed electricity generation capacity.

With hydropower largely exploited to the optimal levels, there has been an increased effort to include wind and solar power generation to the national grid. The government is now accelerating this process to ensure that by 2030, 70% of Sri Lanka’s electricity needs are fulfilled by renewable energy sources.

To reach this target requires a large investment of up to USD 11.5 billion. However, until recently the framework for private investment in the renewable energy sector has not been very conducive. Over the last 2 years several measures have been taken by the government to correct these shortcomings and ensure an optimal investment climate for renewable energy is in place.

Financial Reform

The first step was to ensure cost reflective pricing. Between 2014 and 2022 electricity tariffs had not been adjusted. This resulted in major cash flow problems for the Ceylon Electricity Board that sometimes led to payment delays to power suppliers. However, from August 2022 we have shifted to a cost-reflective pricing structure. Accordingly, electricity tariffs are revised every quarter to reflect costs on a forward looking basis.

The CEB, which has long been a loss making entity, returned a profit in 2023, enabling it to settle significant levels of past debt along with some balance sheet structuring. The company now has a strong balance sheet, a far stronger cash flow position, and a pricing structure that ensures liquidity.

Rigidities in the feeding tariff has also been a concern of past investors. However, this has also been addressed with greater flexibility being introduced to the tariff options, including choices between fixed tariff and variable tariff formulas.

In addition to internal reform, we are also putting in place the framework to attract green financing. Sri Lanka has developed the Road Map for Sustainable Finance, Green Finance Taxonomy, the SDG Investor Map and the Green Bond Framework, that is currently under formulation, creates the enabling environment for Sri Lanka to have a robust engagement in climate finance. The availability of sustainable finance will be an added boost for renewable energy investments in Sri Lanka.

Legislative Reform

There have also been legislative barriers to large scale private investment in the renewable energy sector. Those legal hurdles have also been cleared through necessary amendments to the Electricity Act introduced in 2022.

Institutional Reform

Thirdly, the government is in the final stages of implementing unbundling of the Ceylon Electricity Board. This will result in greater financial and operational autonomy for the distribution, generation, and transmission arms of the CEB, resulting in competition and transparency. Whilst private participation in generation is already available, the unbundling process will open up opportunities for private participation in distribution as well.

This major reform, implemented with the support of the Asian Development Bank, will ensure the CEB operates at the frontier of efficiency, delivering the best outcome for consumers and the most competitive and efficient producers of electricity. The draft legislation for this reform was already been published last month.

Infrastructure Improvements

The ambition of 70% electricity from renewals also requires improved system efficiency and upgrades to integrate more renewable energy, particularly from 2026. Investments will be required in storage, transmission, and distribution, along with the ongoing private investments in generation. Plans for this integration up to 2030 are in place and have begun implementation.

Future Outlook

Following the major reforms implemented in the energy sector in the last 2 years, there has been renewed interest in this sector. There are already large scale solar and wind power projects that have commenced implementation. A major Indian player has commenced implementation of a 350MW wind power plant that is expected to be commissioned in 2025. The same player is considering a further USD 750 million investment in wind power.

Wind power is a major opportunity for Sri Lanka. A recent World Bank report indicates that off-shore wind power in particular has the potential to generate power far greater than Sri Lanka’s requirements. Considering this, Sri Lanka and India are in advanced stages of talks regarding grid inter-connection to enable Sri Lanka to export surplus electricity particularly to the fast growing industrial belt in the Southern part of India. There is also tremendous potential for the development of green hydrogen in Sri Lanka.

Conclusion

Sri Lanka has ambitious plans to fulfil its sustainable, green development agenda. By 2050 the country has committed to achieving net zero. The accelerated renewable energy plan is a key component of this overall effort and is also an essential step on the path towards energy security. Renewable energy will also drive down costs of generation since at present Sri Lanka is compelled to rely on high cost heavy fuels during the dry season. Sri Lanka is in the process of establishing an international climate university, which will continue to unlock opportunities in green energy.

It is clear that Sri Lanka’s renewable energy policy direction is underpinned by multiple motivations and drivers. Therefore investors can expect a high degree of policy continuity in this sector going forward as well. This is the best time to invest in Sri Lanka’s renewable energy journey, and I have no doubt such investments will generate significant value for shareholders and Sri Lanka’s consumers over the next several decades.

A gazette notification has been issued to allow for the import of vehicles essential for certain state institutions, said finance state minister Ranjith Siyambalapitiya.

For foreign-funded projects, the vehicles will be bought from own funds. He said the requirements are two buses for the Education Ministry, 21 double-cabs and three mobile maternity clinics for the Health Ministry and a SUV for the Labour Ministry.

Three ramp buses are required to transport air passengers, he said.

Ranil Wickremesinghe should be given another chance as the president to revive the economy and stabilize the country, said minister Prasanna Ranatunga.

The minister said that he personally believed Wickremesinghe to be the best person to resolve the prevailing economic crisis.

The country is not in a situation to experiment, which will only worsen its collapse, he told local government representatives in Minuwangoda and Gampaha.

(lankadeepa.lk)

A new Deputy Inspector General (DIG) of Police has been appointed to the Criminal Investigations Department (CID), Sri Lanka Police reported.

Accordingly, DIG of Police Western Province (North) Rohan Premaratne has been appointed as the DIG of the CID.

There is ‘certain injustice’ to the people due to the VAT increase from 15 per cent to 18 pc, said former finance minister Ravi Karunanayake.

“Now, IMF representatives are here. VAT has been increased on their instructions. They are saying income and expenditure should be balanced.”

“There is certain injustice in the VAT increase from 15 pc to 18 pc. The three pc increase to earn Rs. 146 billion is for paying the salaries of 1.4 million public sector workers,” he said in reference to the increasing cost of living.

Therefore, Karunanayake said, the productivity of the VAT increase should be reconsidered.

Instead of increasing VAT, what is needed is to create productivity and end wastage, he said.

The IMF should be told to let us decide the way to earn income.

Have no undue fears over TIN

Speaking further, Karunanayake said people should have no undue fears with regard to the mandatory taxpayer identification number (TIN).

Having a TIN does not necessarily mean having to pay tax, he said, adding that only those falling under the taxpaying category will have to pay taxes.

It is a shame that only 18,000 out of 120,000 companies and between 200,000 and 300,000 out of 22 million people pay taxes.

Almost 94 pc will not have to pay after they register for TIN, said Karunanayake.

For 75 years, the country had no professional basis for progress and what is being done now is to take it out of bankruptcy, he added.

Samagi Jana Balawegaya (SJB) member Nayana Wasalathilake was sworn in as a Member of the Parliament of Sri Lanka today (Jan 12).

Wasalathilake, a top businessman, was sworn in before Speaker of the House Mahinda Yapa Abeywardena in Parliament.

Nayana Wasalathilake fills the vacancy created due to the recent resignation of SJB MP Chaminda Wijesiri.

Earlier this week (Jan 09), MP Wijesiri announced his decision to step down as a Member of Parliament.

At the time, he said the Parliament needed a new mandate, adding that the public was cursing all 225 MPs, including their children, and that his children did not deserve such ill will.

Mahinda Kodituwakku, the self-proclaimed ‘Awalokiteshwara Bodhisattva’ in Sri Lanka has been arrested by Police.

“The person who claims to be the ‘Avalokithesvara’ arrested by the CID in Pannipitiya” Police said without providing further details.

Last week an overseas travel ban was imposed by the Fort Magistrate’s Court when the case filed against Kodituwakku was taken up for hearing.

The Fort Magistrate’s Court also issued an order to probe his bank accounts.

Mahinda Kodituwakku is accused of committing irreligious activities against Buddhism.

The second paper of the ongoing GCE Advanced Level Examination Agricultural Science subject has been nullified in all three languages, the Department of Examinations announced today.

According to the Exam Department, the decision has been taken to nullify the exam paper which was issued on Wednesday (Jan 10) due to suspicions of its leakage on social media before the examination.

The Commissioner General of Examinations has declared that a new paper for the affected subject will be provided after the completion of the ongoing exams.

The Commissioner General of Examinations is expected to announce later the date of the new Agricultural Science second paper of the Advanced Level Examination.

The prices of locally-manufactured medicines will go up by more than 20 per cent within the next two months as the machinery used and packaging material are not exempted from VAT, producers said.

VAT is not applicable only for raw materials, they said, adding that they had no option but to pass on the extra production cost to consumers.

Producers are also forced to minimize production and staff and as a result, allowing imports to take place, they noted.

The country presently has around 20 medicines manufacturers, who want an immediate discussion with authorities on how to arrest the situation.

(aruna.lk)

Palitha Range Bandara will continue as general secretary of the UNP this year.

He has been reappointed to the position by party leader, president Ranil Wickremesinghe.

With Bandara presently unwell, his appointment letter was received by the party’s CEO Shamal Senarath at Sirikotha.

The term of the UNP’s office-bearers ended on 31 December.

As per the party constitution, the leader should appoint the general secretary and the treasurer.

The other officials are appointed by the working committee.

In the meantime, Wickremesinghe has decided to appoint a leadership council to prepare the party for national elections.

Japanese finance minister Shunichi Suzuki has urged Sri Lanka to complete its debt restructuring as soon as possible, according to SJB MP Dr. Harsha de Silva.

Also, the country should not jeopardize the IMF programme, Suzuki told opposition leader Sajith Premadasa at a meeting at the Japanese embassy in Colombo.

It was also attended by ambassador Mizukoshi Hideki.

Later, de Silva said the Japanese minister also wanted Sri Lanka to repay due for the cancellation of Colombo light rail transit project in order to start stalled projects.

Suzuki led a Japanese delegation to the country on a two-day official visit.

The laws will be strictly enforced to eradicate the trade mafia generating profits without registering with the Inland Revenue Department, State Minister of Finance, Ranjith Siambalapitiya warned.

State Minister Siyambalapitiya further outlined the government’s plan to expand the tax base, anticipating a rise in the direct tax percentage to 40%.

He made the observations while participating in a special VAT awareness conference at the Ministry of Finance yesterday, organized by Saman Ratnapriya, the Director General of Presidential Trade Unions, for the benefit of civil society activists, government officials, political activists, trade union leaders, and journalists.

State Minister Ranjith Siyambalapitiya further said these challenging times affect everyone, regardless of their economic status, as incomes decrease and expenses rise.

The government acknowledges these difficulties and recognizes the necessity of its ongoing program to address the country’s problems.

Increasing government revenue is crucial for economic development, and to achieve this, the government aims to expand the tax base. The direct tax percentage has already risen from 20% to 30%, with plans to further increase it to 40%. The government also enforces strict laws to combat the trade mafia, preventing them from making unfair profits through fake bills without proper registration with the Inland Revenue Department. Additionally, there is potential to reduce indirect taxes in the future, he said.

Also addressing the conference, Tax Consultant of the Finance Ministry’s Finance Department Tanuja Perera said businesses are required to remit VAT to the Inland Revenue Department monthly, with the amount charged from the 1st to the 31st of January due by the 20th of February.

“Failure to do so may result in legal action under the VAT Act by the Ministry of Finance. Displaying the Inland Revenue Department’s issued license is mandatory for shops eligible to charge VAT. Invoices, following a format set by the Commissioner General of Inland Revenue, must be issued to consumers after VAT is applied. Strict enforcement is in place against fraudulent businesses collecting money without proper VAT registration, with penalties and collected VAT funds pursued by the government, Perera added.

Meanwhile, Director General of Trade Unions to the President, Saman Ratnapriya, said the VAT amendment has sparked heated discussions in today’s society, particularly since President Ranil Wickremesinghe introduced it in the 2024 budget in his capacity as the Finance Minister.

“This budget serves as the economic blueprint for the current year, and without meaningful societal discussions, turning its proposals into reality becomes challenging. That’s why seminars on VAT are organized.

“Numerous misconceptions surround this VAT amendment, notably the increase from 15% to 18%. While the tax has risen by 3% for existing goods, some items have gone from 0% to 18%. Additionally, due to tax adjustments, certain products experience a lower-than-expected VAT increase of 18%. To navigate these complexities, a thorough societal discourse on this VAT amendment is crucial,” he said.

Also speaking at the conference, K. K. I. Eranda from the government revenue unit of the President’s Office said that government inefficiencies in VAT collection have been identified, impacting the potential contribution to the economy.

“Proper VAT collection could add 6% to the gross domestic product, but currently, only 2% is realized. Three primary areas of tax leakage have been uncovered: businessmen not remitting collected taxes, irregularities by officials, and losses due to tax exemptions. Addressing these leakages is crucial for stabilizing the economy.

“In the first half of 2019, VAT was at 15%, reduced to 8% in 2020, and maintained for the next three years. However, the economic downturn persisted, indicating that the VAT reduction alone did not stimulate growth. To revitalize the collapsed economy, a VAT increase of 18% is proposed.

“Currently, around thirteen thousand businesses are registered for VAT collection, with the government aiming to increase this number to fifty thousand in the future,” he added.