Sri Lanka’s efforts to rebuild investor confidence are showing results, with Japanese-funded development projects resuming after being suspended for nearly three years. The clearest signal came this week with the completion of the Habarana–Veyangoda Transmission Line Project, the first major Japanese-backed initiative finalized since the country’s 2022 debt default.
The project was financed through a concessional loan of JPY 9,573 million (approximately US$ 65 million / Rs. 21.5 billion) provided by the Japan International Cooperation Agency (JICA). It involved constructing advanced 220kV low-loss transmission lines and substations, including the Habarana substation, now one of the largest in Sri Lanka. Beyond its engineering significance, the project stands as a symbol of the success of Sri Lanka’s debt restructuring strategy in reopening access to international development financing.
“This project is a vital part of Sri Lanka’s electricity system, ensuring stability, reliability, and greater capacity,” said Energy Minister Kumara Jayakody, speaking at the relaunch ceremony. “It will help prevent the power failures we faced in the recent past. We appreciate the Japanese people’s steadfast friendship and support and eagerly await greater Japanese investment in Sri Lanka.”
JICA Chief Representative KURONUMA Kenji underscored the broader benefits: “A stable and efficient supply of power is the cornerstone of the country’s economic development. With the addition of cutting-edge transmission infrastructure, the project reduces losses, enables integration of renewable energy, and delivers cleaner power to the public.”
A senior Finance Ministry official described the achievement as “the first tangible outcome of the bilateral debt restructuring agreement signed with Japan in March 2025. It shows that international partners are placing greater trust in Sri Lanka’s recovery path, which is crucial for future growth.”
The Habarana–Veyangoda link is part of a broader package of 11 large-scale Japanese projects suspended in 2022 and now gradually being revived. These include the second terminal of Bandaranaike International Airport, the Kandy City Wastewater Project, Anuradhapura and Kalu Ganga water supply extensions, the Digital Terrestrial Television Broadcasting programme, and rural infrastructure development initiatives.
With electricity demand having doubled over the past two decades, the transmission project represents both a technological upgrade and a key investment in energy security. It also strengthens Sri Lanka’s path toward generating 70 percent of its power from renewable sources by 2030, enhancing the grid’s capacity to absorb solar, wind, and hydropower.
Through restructured programmes and renewed international goodwill, the government has turned what began as a symbolic proposal into a milestone achievement—underscoring Sri Lanka’s readiness for partnership, progress, and sustainable growth.
