• Debt absorption by Treasury yet to be decided: PSRS Head
• Rs. 412.1 b financial loss from 2013 to 2023
• Rs. 359 b accumulated as major payables as of 30 April this year
• Rs. 16,547 m to IPPs; Rs. 9,085 m to NCRE developers; Rs. 1,229 m to CPC

The fate of the billions of rupees in debt owed by the Ceylon Electricity Board (CEB) remains undecided despite the recent passage of the Electricity Reforms Act in Parliament, aimed at restructuring the State-Owned Entity (SOE). 

According to the Power Sector Reforms Secretariat (PSRS), a decision on how to handle the substantial financial liabilities is yet to be made.

When contacted by The Sunday Morning, PSRS Head Dr. Pradeep Perera stated: “How it is going to be allocated among different entities will be mentioned in the transfer scheme, which is to be prepared.” 

In response to a query on whether the debt would be absorbed by the Treasury, Dr. Perera said: “We haven’t worked it out yet. That will be decided soon.”

In a letter dated 6 June from CEB Acting General Manager Eng. Dr. Narendra de Silva to the Public Utilities Commission of Sri Lanka (PUCSL) Director General regarding the second electricity tariff revision for 2024, it was stated that the CEB’s statutory accounts revealed accumulated financial losses of Rs. 412.1 billion from 2013 to 2023.

According to the statistics, the CEB incurred losses of Rs. 17.3 billion in 2024, Rs. 14.5 billion in 2016, Rs. 47.6 billion in 2017, Rs. 31.9 billion in 2018, Rs. 97.3 billion in 2019, Rs. 69.2 billion in 2020, Rs. 34.6 billion in 2021, and Rs. 203.5 billion in 2022, the highest annual loss recorded.

In the letter, de Silva stated that the board had managed to service some debts to Independent Power Producers (IPPs), Non-Conventional Renewable Energy (NCRE) developers, Solar Rooftop (RT) power producers, and material suppliers following tariff revisions. 

However, the accumulated total of major payable balances, including project loans, still stands at an unprecedented Rs. 359 billion as of 30 April this year.

Additionally, the CEB owes Rs. 1,229 million to the Ceylon Petroleum Corporation (CPC), Rs. 16,547 million to IPPs, and Rs. 9,085 million to NCRE developers. 

Under short-term payables, the CEB owes Rs. 10,226 million as deferred Value-Added Tax (VAT) CEB Acting General Manager Eng. Dr. Narendra de Silva(for 2022/’23 and 2023/’24 shipments), Rs. 8,471 million to Lanka Coal, and Rs. 138 million for other coal-related payables. 

The CEB also has outstanding Letter of Credit (LC) and Telegraphic Transfer (TT) payments amounting to Rs. 7,155 million. 

The total payables for solar rooftop projects are Rs. 350 million and the amount owed to local suppliers is Rs. 1,396 million. For the Uma Oya project, the CEB still owes Rs. 108 million and for other projects it owes Rs. 264 million.

Meanwhile, the CEB also has outstanding loan balances with several banks: Rs. 51,906 million with People’s Bank, Rs. 5,000 million with the National Savings Bank, Rs. 14,484 million with the Bank of Ceylon, Rs. 3,104 million with Seylan Bank, and Rs. 6,208 million with Nations Trust Bank. Additionally, it has a total net bank overdraft of Rs. 18,952 million. 

Furthermore, the CEB owes a total of Rs. 63,673 million in Treasury sub-loans, Rs. 15,582 million for the Broadlands Hydropower Project, and Rs. 100,445 million to the Asian Development Bank (ADB).

A top Government official, who spoke to The Sunday Morning on conditions of anonymity, revealed that the primary challenge in restructuring the CEB lay not only in enacting relevant laws but also in addressing the substantial debt burden of the organisation. 

The official emphasised that no investor would willingly assume ownership of a company burdened with such significant debts.

“This issue is currently under discussion, but no final decision has been made yet,” the official stated. 

“If the debts are transferred to the future entities that will be formed, inevitably these costs will be passed on to the customers, as private entities will not absorb the losses. This would pose a major problem. Therefore, a proper solution is urgently needed. We are actively exploring options,” the official stressed.