Sri Lanka - Secure, Affordable, and Sustainable Energy Program Multiphase Programmatic Approach (MPA) Including Phase 1 Credit for the Secure, Affordable, and Sustainable Energy Project

Overview & Synopsis

The objective of the Secure, Affordable, and Sustainable Energy Program Multiphase Programmatic Approach (MPA) Including Phase 1 Credit for the Secure, Affordable, and Sustainable Energy Project is to strengthen transmission infrastructure and institutional capacity for better renewable energy integration. There are two components to the project, the first component being upgrading infrastructure to facilitate grid integration of renewable energy. There is an urgent need to address weaknesses in the 220 kilovolts (kV) transmission grid to ensure stability, security of supply, and scaling up of renewable energy deployment. The increasing share of VRE resources has exerted pressure on the stability of the power system, especially during low-demand seasons, leading to curtailments and frequent blackouts over the past five years. CEB has recognized the importance of accelerating transmission grid development to ensure the reliable integration of generators (particularly distant renewable energy resources) and load centers while facilitating an ambitious goal of a 70 percent renewable energy share by 2030, as well as enhanced security of the electricity transmission grid to attain short-term and seasonal system flexibility. Significant strengthening, upgrades, and modernization of transmission systems were outlined in the LTGEP. CEB is developing a broader power transmission program for FY26-30 in close coordination with development partners. The second component is the Strengthening institutional capacity. In the context of higher VRE penetration, it will be critical to ensure system stability and reliability and improve operational flexibility. As current grid management issues limit the ability of CEB to meet renewable energy targets and attract the necessary private investments, component 2 will help strengthen the institutional capacity of CEB and its successor entities, including the NSO, through technical assistance activities focused on building capacity for long-term integrated power system planning to manage higher VRE penetration, including the procurement of advanced planning tools for power system analysis, resource adequacy assessments, interconnection studies, modeling and forecasting, power system protection, and operational planning.