CEB Mafia Blocks $3.5 Billion Renewable Energy Investments: A Crisis Unfolds

 

Renewable Energy Vision Under Threat

Sri Lanka’s ambition to transition towards renewable energy has gained traction for two key reasons: reducing dependence on costly fossil fuels and minimizing carbon emissions. However, recent developments indicate that a bureaucratic power struggle within the Ceylon Electricity Board (CEB) is stalling progress, putting billions in investment at risk.

Within days of the new government taking office, the CEB initiated a review of large-scale renewable energy projects that had already commenced under the Expression of Interest (EOI) process, despite prior approval from the Ministry of Power. CEB Chairman Dr. Tilak Siyabalapitiya led the proposal, citing the need for a more "streamlined" approach.

Attorney General’s Warning Ignored

Before the proposal reached the Cabinet, it was reviewed by the Attorney General (AG), who strongly advised against halting the projects. In a three-page report dated December 12, 2024, the AG warned that reconsidering legally approved projects could harm the government’s credibility and deter future investments. The report stated that such actions were unnecessary and could be legally challenged, exposing the government to potential lawsuits.

Despite this warning, the Minister of Power instructed officials to move forward with the proposal. Dr. Siyabalapitiya, along with the Additional Secretary of the Ministry of Energy, prepared the Cabinet paper, which was presented on December 26, 2024—coinciding with the 20th anniversary of the devastating tsunami.

First page of the Attorney General's observation issued on December 20, 2024

Cabinet Misled, Projects Stalled

A crucial detail in this controversy is that the Attorney General’s observations were not presented to the Cabinet, effectively misleading decision-makers. The proposal called for the formation of a special committee under the Ministry of Finance to review all EOI renewable projects within two weeks. However, two months have passed, and the committee has yet to deliver its report, leaving 43 renewable energy projects in limbo.

Investors, frustrated by the standstill, have been approaching the CEB for updates. The CEB deflects responsibility to the committee, which continues to delay its decision. The resulting paralysis has stalled projects with the potential to add over 3,000 MW of renewable energy to the national grid by 2027.

The Impact: A $3.5 Billion Investment at Risk

The consequences of this delay are severe:

• $3.5 billion in renewable energy investments is now at risk of being abandoned.
• Sri Lanka’s reputation as an investment-friendly nation is deteriorating, discouraging future foreign and local investors.
• The country remains dependent on costly fossil fuels, despite plans to achieve 70% renewable energy by 2030.
• The crisis jeopardizes 10,000 direct jobs and 30,000 indirect jobs, which these projects would have created.
  
  
  
  
  
  
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  The cabinet paper presented, misleading the cabinet and contrary to the Attorney General's observations

  
  
  
  

Who is Behind the Renewable Energy Roadblock?

Several prominent investors, including leading Sri Lankan conglomerates such as Hayleys, Asia Power, Senoc, Akbar Brothers, Aberdeen Holdings, and Laufs, are among the affected parties. The so-called "power mafia" within the CEB, led by Dr. Tilak Siyabalapitiya, has been accused of favoring fossil fuel-based energy over renewables, allegedly to serve personal and institutional interests.

A Call for Immediate Action

President Anura Kumara Dissanayake has consistently advocated for investment-driven economic growth and renewable energy expansion. However, the bureaucratic sabotage of these projects contradicts the government’s vision. Immediate action is needed to resolve the crisis:

1. A high-level meeting should be convened, bringing together affected investors, the Ministry of Finance, the Ministry of Energy, the CEB, and the Sustainable Energy Authority to address the issue transparently.
2. The government must introduce a fair, transparent, and formula-based tariff system aligned with regional standards.
3. A 24-month extension should be granted for financial settlements and project completion, ensuring that the stalled projects move forward.

If swift action is not taken, Sri Lanka risks not only losing a multi-billion-dollar investment opportunity but also damaging its long-term economic and environmental goals. The time to act is now.

Source: https://www.theleader.lk/featured/red-alert/30327-3-5