ADB Approves $57.4 M Package for Sri Lanka’s Rooftop Solar Expansion

ADB Country Director for Sri Lanka Shannon Cowlin said the project will strengthen access to affordable renewable energy while preparing the country's electricity grid for a cleaner, more resilient and inclusive energy future.

The Asian Development Bank (ADB) has approved a $57.4 million financing package to help Sri Lanka expand access to affordable renewable energy through rooftop solar systems and a new virtual net metering model that allows more households, businesses and community organisations to benefit from solar power.

The financing package includes a $35 million concessional loan, $16.9 million in grants from the European Union, $5.5 million from the Japan Fund for the Joint Crediting Mechanism, along with counterpart funding from implementing agencies, bringing the project's total value to $80.5 million. The investment will support the Rooftop Solar Aggregation and Virtual Net Metering Project, which is designed to reduce greenhouse gas emissions while making clean energy more accessible for consumers who cannot install solar panels on their own properties.

New model allows more consumers to benefit from solar power

The project will be implemented through two government-owned power utilities, Electricity Distribution Lanka (Private) Limited and Lanka Electricity Company (Private) Limited, which will introduce a utility-led system that aggregates electricity generated from large rooftop solar installations. Under the virtual net metering model, electricity generated by these solar systems will be pooled and the energy credits will be distributed virtually to eligible consumers. This approach allows multiple users to share the benefits of renewable energy even if they lack suitable roof space or cannot afford to install solar panels themselves.

ADB Country Director for Sri Lanka Shannon Cowlin said the project will strengthen access to affordable renewable energy while preparing the country's electricity grid for a cleaner, more resilient and inclusive energy future. She said the initiative will also support small businesses, modernise electricity distribution networks, encourage digital transformation within the power sector and create new employment opportunities for women and young people in the growing clean energy industry.

Project supports businesses, communities and green skills

The financing will support the installation of approximately 25 megawatt-peak (MWp) of rooftop solar capacity while introducing the country's new aggregation and virtual net metering framework. The project will also modernise and digitalise the electricity distribution systems operated by both utilities, improving their ability to integrate larger amounts of distributed renewable energy into the national grid. Eligible micro, small and medium-sized enterprises (MSMEs), together with community organisations that face financial or space limitations, will be able to lower electricity costs through allocations provided under a social compensation mechanism supported by the project. A new training facility will be established to build green skills, strengthen women's participation in the clean energy sector and enhance technical capacity in advanced low-carbon technologies.

ADB said the project will help Sri Lanka accelerate its transition towards cleaner energy while improving energy affordability, supporting business growth, reducing emissions and building a more modern electricity system capable of meeting future demand.