Sri Lanka secures ADB, EU and Japan financing for rooftop solar and virtual net metering project

The Government of Sri Lanka has secured financing from the Asian Development Bank (ADB), with grant assistance from the European Union (EU) and the Government of Japan, for the Rooftop Solar Integration and Virtual Net Metering Project, aimed at expanding access to affordable and clean energy.

The financing comprises a concessional loan of USD 35 million from the ADB, a grant of EUR 15.4 million from the European Union, equivalent to approximately USD 16.94 million, and a grant of USD 5.5 million from the Japan Fund for the Joint Crediting Mechanism (JFJCM).

The relevant loan and grant agreements were signed at the General Treasury in Colombo on 1 October 2026 by Dr. Harshana Suriyapperuma, Secretary to the Ministry of Finance, Planning and Economic Development, on behalf of the Government of Sri Lanka, and Ms. Shannon Cowlin, ADB Country Director for Sri Lanka, on behalf of the Asian Development Bank. Ms. Virginie Laffeur-Tighe, Head of Partnerships of the Delegation of the European Union to Sri Lanka, and Mr. Naoki Kamoshida, Deputy Chief of Mission (Minister) of the Embassy of Japan in Sri Lanka, were also present at the signing ceremony.

The Ministry of Energy will implement the project from 2026 to 2030 in collaboration with Electricity Distribution Lanka (Private) Limited (EDL) and Lanka Electricity Company (Private) Limited (LECO), in support of the Government’s efforts to expand access to affordable clean energy.

EDL’s CEBAssist solution will be enhanced through the introduction of an Advanced Metering Infrastructure (AMI) system, a Distributed Energy Resource Management (DERM) system and distribution control centres supported by an Advanced Distribution Management System (ADMS). These systems are expected to digitalise EDL’s customer and operational services and improve network reliability by enabling faster restoration of electricity supply following outages.

Smart meters and related infrastructure will also provide real-time visibility and control required to expand renewable energy use and extend the benefits of solar power to more consumers, supporting the establishment of a more efficient, reliable and sustainable smart grid.

The project will introduce Virtual Net Metering (VNM) in Sri Lanka for the first time. Through EU grant financing, 25 MW of aggregated rooftop solar photovoltaic (PV) capacity will be deployed to help reduce the electricity cost burden on small and medium-scale entrepreneurs. These solar power plants will be equipped with advanced control capabilities, enabling the National System Operator to manage their generation in accordance with prevailing network constraints.

Within LECO’s service area, low-loss conductors will also be installed alongside the VNM scheme to improve distribution network efficiency. High-capacity battery energy storage systems at distribution transformer level will increase the network’s capacity to accommodate renewable energy while providing greater control over renewable energy management.

With particular focus on the Negombo area, LECO expects the project to enhance network capacity to connect more high-capacity commercial and industrial loads, while strengthening the network to accommodate higher levels of renewable energy and improving the flexibility, resilience and reliability of electricity supply.