Sri Lanka’s Renewable Energy Sector Faces Collapse Over LKR 10 Bn Unpaid Dues 📈

The Federation of Renewable Energy Developers (FRED) warns of an industry-wide shutdown as payments for power supplied to the national grid have been halted since December 2025. • Financial Crisis Details: • Total Outstanding: LKR 10 Billion (as of April 2026). • Monthly Accumulation: LKR 2.5 Billion. • Cause: National System Operator (NSO) is prioritizing payments for expensive thermal power (diesel/heavy fuel) costing over LKR 100 per kWh due to Iran-US geopolitical tensions. • Sector Impact & Capacity: The crisis affects ground-mounted solar, mini-hydro, wind, and biomass installations. Over 400 SMEs and local entrepreneurs are currently unable to service bank loans or pay salaries. • Downstream Risks: • Banking Sector: Potential surge in Non-Performing Loans (NPLs). • Operational: Lack of funds for spare parts leading to plant breakdowns and increased energy deficits. • National Goals: Threatens investor confidence and derails Sri Lanka’s clean energy targets and sovereign credibility with international agencies. • Urgent Demands: FRED is calling for immediate Treasury intervention and a Cabinet directive to allocate LKR 10 Billion to settle dues, insisting on payment parity with fossil fuel generators to prevent a mass default of the SME energy sector.