Chicken and egg situation in new renewable energy
While renewable industry officials lament that banks have stopped lending to their projects, bankers counter saying no one has presented new renewable energy project proposals.
The renewable energy industry owes Rs. 60 billion to private banks. There is no way for them to repay these amounts without a new feeding tariff, is what industry officials say.
Another section of the industry says that banks have not stopped lending money, but they are concerned about the cash that they are to be paid by the renewable energy operators. “Without a proper tariff, banks will not fund any projects. We expect a bankable tariff,” Kushan Jayasurya, Vice President, Solar Industries Association told The Business Times.
A banker told the Business Times that the project pipeline for renewable energy has dried up. “It is a chicken and egg situation because we have not received proposals.” Mr. Jayasuriya added the industry is awaiting the tariff-based formula so that renewable energy projects can become bankable again.
Last year, 211 megawatts of renewable energy were added to the energy mix, of which 146 megawatts came from rooftop solar energy projects.
The Sri Lankan Solar Energy industry has seen a 66 per cent drop in new solar power plants last year, compared to 2021 amply reflecting the unfeasibility of establishing new plants, thereby further putting a strain on the power supply to the National Grid.
During 2027-2030, an additional 3,075 megawatts are expected to come from renewable energy sources and 1,525 megawatts from battery storage.
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