The Asian Development Bank (ADB) has approved a $300 million (£221.7m) loan to help Sri Lanka cut its reliance on imported oil and boost the use of renewable energy.
Half of the loan will fund a 30MW hydropower plant at Moragolla in Central Province as well as upgrade transmission lines and other infrastructure in “needy areas”.
The plant is expected to generate an extra 97.7 million units of clean energy, saving more than 72,000 tonnes of carbon emissions every year, the ADB said.
The remainder of the fund, expected to be extended in 2016, will help expand the 33 kilovolt medium voltage network to improve distribution of electricity to consumers. It will also finance the construction of transmission lines to transfer power from two 100MW wind farms to be built in the Northern Province.
Mukhtor Khamudkhanov, ADB Principal Energy Specialist said: “The country’s heavy dependence on expensive imported petroleum oil hurts the economy, undermines energy security and harms the environment. This loan will help Sri Lanka expand the use of renewable energy for power generation and have major benefits both for poor communities and the broader economy.”