The Ceylon Electricity Board’s inability to pay hydro power developers Rs. 20 billion in the past 11 months threatens to shut down Sri Lanka’s privately owned hydro power sector.
Sri Lanka’s Small Hydro Power Developers Association (SHPDA) President Thusitha Peiris claimed one plant with 0.9 MW capacity had to close owing to cash-flow concerns.
Friday was the association’s 15th AGM.
Public Utilities Commission, Sri Lanka’s power sector regulator, required CEB to pay renewable energy developers within three months before approving a price hike.
Peiris said that CEB has yet to honour its deal with small hydro developers to pay Rs.100 million daily.
Hydro power developers are battling to repay project loans to banks while meeting operational expenditures.
In recent months, banks have categorised Rs.30 billion in sector loans as non-performing due to non-payment. Peiris noted that many developers no longer have access to bank working money.
“Our industry has never faced this problem. “Working capital is the biggest issue,” he remarked.
The group said CEB’s late payments to renewable energy developers have hampered future investments in the sector.
High interest rates also affect developers.
The group welcomed the government’s decision to amend the feed-in-tariff (FIT) for renewable energy projects through a committee, but asked that the present tariff rate for over 15 small hydro plants be increased in keeping with existing financial constraints.
Privately operated small and medium hydropower plants supply the CEB with 440MW of reliable, inexpensive power.
