The Asian Infrastructure Investment Bank (AIIB) will lend $52m in sovereign-backed financing to Sri Lanka.
This investment aims to unlock the country's renewable energy potential and advance sustainable development through the Kerawalapitiya-Port L Second Transmission Line Project.
This project is considered crucial for ensuring uninterrupted power supply and maintaining grid stability in the Greater Colombo area.
The loan agreement was signed by AIIB director general for Public Sector Clients Department (Region 1) Rajat Misra, and Dr Harshana Suriyapperuma, treasury secretary and finance minister of Sri Lanka.
The signing was witnessed by Sri Lanka's Minister of Energy Kumara Jayakody, Deputy Minister of Economic Development Dr Anil Jayantha Fernando, and AIIB president Jin Liqun.
The project covers the end-to-end delivery of a 220kV single‑circuit underground cable system, including design, procurement, construction, testing, and commissioning.
This system will connect the Kerawalapitiya Switching Station and the Colombo Port L Grid Substation.
It will complement the first line, commissioned in 2019, which will soon be insufficient to meet the projected electricity demand in the area.
Misra said: "This marks AIIB’s first energy sector project in Sri Lanka, reflecting our strong commitment to supporting the country’s power infrastructure and energy transition.
"By enhancing grid stability and ensuring reliable electricity supply, the project will deliver lasting economic and social benefits for Sri Lanka."
The project will provide broad benefits to local communities, urban services, and businesses across the Greater Colombo development area, stated AIIB.
AIIB has supported five projects in the country, with total financing of $534m across the energy, transport, and urban sectors.
Last month, AIIB and the Industrial Development Bank of Turkey signed a $65m senior debt financing package.
This package supports the Renewable Energy Resource Zone (YEKA) Erzin-2 Hatay Solar PV Project in Turkey, with each bank contributing $32.5m.
The project will develop a 100MW solar power plant in Hatay Province, awarded in June 2022 under the government’s YEKA programme.
