⚡ LAUGFS Power Flags Rising Costs & Regulatory Hurdles in Renewable Sector

• Macro Context & Sector Performance: Sri Lanka’s renewable energy sector maintains policy support to boost energy security. Rooftop solar power generated 9.4% of total national electricity in 2025, lowering thermal dependence but creating daytime-nighttime grid mismatches. • Challenges & Cost Pressures: LAUGFS Power PLC reported longer timelines and cost pressures for 2025/26. Key drivers include stricter grid interconnection rules, longer approval delays, import duty/tax changes, and ongoing rupee depreciation affecting equipment costs. • Company Operations & Diversification: • Continuing execution of a 2 MW mini hydro power project alongside solar power portfolio expansion. • Investing in remote hydro monitoring and workforce technical training. • Exploring growth in Mechanical, Electrical, and Plumbing (MEP), large-scale wind power, hybrid systems, and energy storage. • Outlook: Long-term prospects remain positive due to rising demand and lower tech costs, though grid capacity limits, complex regulations, and financing issues pose near-term risks.