- Kanchana says Rs. 70 bn State bank loans expected
- Agreements reached with BOC, People’s Bank
- New tariff may not be fully reflected until billing cycle concludes
Minister of Power and Energy Kanchana Wijesekera noted that with the increase in electricity tariffs by 66%, agreements have been reached between State banks and the Ceylon Electricity Board (CEB) for loans of over Rs. 70 billion for the procurement of coal and fuel to ensure an uninterrupted power supply in the country.
Convening a media briefing yesterday (16), Wijesekera stated that a loan of Rs. 22 billion had been confirmed with the Bank of Ceylon (BOC) for coal procurement, whilst a loan of Rs. 50 billion had been requested for the procurement of fuel required for private and CEB-owned power plants.
“We had a discussion with the banks on Wednesday (15). When we officially received the approval for the tariff revision, banks confirmed the loans to us. In particular, the BOC has agreed to an additional loan of Rs. 22 billion for the purpose of coal procurement. We requested the People’s Bank for a loan of Rs. 50 billion. We were unable to pay renewable energy suppliers and for the fuel that we obtain from the Ceylon Petroleum Corporation. We reached a preliminary agreement with the banks on Wednesday evening. If the proposal that we submitted was approved in January, we would have been able to supply uninterrupted power since then.”
Addressing allegations directed by various individuals pertaining to the prices paid for the procurement of coal and fuel for the generation of power, he said: “There are differences in prices when we purchase through credit and via on-the-spot cash payments. The issue that occurred is that over the years because the finances we generated through the previous tariffs were insufficient, we had to purchase on credit. So, I believe that with the new tariff revision being in effect, the CEB can procure coal and fuel at lower costs.”
Wijesekera added that the tariff revision which was effected on Wednesday was a major step forward in the International Monetary Fund (IMF) discussions that are ongoing. “I believe that we are nearing the IMF bailout of $ 2.9 billion.”
With the latest increase in electricity tariffs, the average cost for consumers using 0-30 units has been increased from Rs. 214 to Rs. 753, and the cost for those consuming 31-60 units has been increased from Rs. 677 to Rs. 2,178; the cost for those consuming 61-90 units will be increased from Rs. 1,625 to Rs. 3,970; the cost for those consuming 91- 120 units will be increased from Rs. 3,358 to Rs. 6,238; the cost for those consuming 121-180 units will be increased from Rs. 5,464 to Rs. 8,344, while the average cost of those consuming 181 units and above will be increased from Rs. 15,460 to Rs. 18,300.
Whilst the new tariff will be calculated from 15 February onwards, some electricity consumers may not see it fully reflected in their bills until a current billing cycle concludes, which, according to CEB, could be around the end of next month (March).
The CEB stated on Wednesday evening that the approval of the Public Utilities Commission of Sri Lanka (PUCSL) had been received to raise electricity tariffs by 66%. While the majority of the PUCSL members approved an increase in electricity tariffs by 66% effective from Wednesday, notwithstanding the objections raised by the Commission’s Chairman Janaka Ratnayake, the PUCSL wrote to the CEB on Wednesday stating that the tariff revision proposed by the PUCSL cannot be implemented.
The electricity tariff hike proposal was passed as it was greenlit by three PUCSL members, with Ratnayake vehemently opposing it. On 2 January, the PUCSL received a Cabinet of Ministers-approved proposal from the CEB, seeking to increase electricity tariffs by 66% in order to secure additional revenue of Rs. 287 billion for the utility provider to avoid losses. However, as the electricity tariff hike proposal became embroiled in heated debates, Ratnayake and the Commission members continuously failed to reach a consensus on the matter.