Sri Lanka’s largest wind power project in Puttalam (20 MW)

Sri Lanka’s largest wind power project is to be commissioned in May this year under the government’s initiative of producing 10 % of the country’s’ electricity from renewable energy sources by 2015.

Work on the project, is nearing completion with logistics support from Agility Project Logistics, a global leader in project logistics services. This will be the first ever wind farm in Sri Lanka and is estimated cost Rs. 4.2 billion.

In Sri Lanka as in other countries, energy shortages and high rates are compromising economic growth, the competitiveness of industries and the provision of reliable energy services. To help address these challenges, USAID is working with the Government of Sri Lanka to harness wind energy to strengthen Sri Lanka’s energy security and diversify its energy supply options.

Sri Lanka is blessed with vast wind energy resources due to its location in the Indian Ocean. However, despite this potential, Sri Lanka still has only one small wind power plant connected to its national grid. Realizing the importance of developing sustainable sources of energy, the Government of Sri Lanka has set a target to produce 10 percent of its electricity from renewable energy sources by 2015. To meet this goal, the Government has set up a new agency called the Sustainable Energy Authority (SEA) to facilitate private sector investment in renewable energy resources, such as wind, small hydropower and biomass.

In 2003, the U.S. National Renewable Energy Laboratory (NREL) conducted a comprehensive wind energy resource assessment in Sri Lanka and the Maldives under USAID’s South Asia Regional Initiative for Energy (SARI/Energy) program. The wind assessment showed that many areas in Sri Lanka have good to excellent wind resources that are ideal for commercial development.

This initiative encouraged several private sector organizations to submit proposals to the Ceylon Electricity Board (CEB), the national electricity utility of Sri Lanka, to develop wind power in Sri Lanka. In 2006, the CEB signed Letters of Intent with four commercial developers for the purpose of building plants to produce 34 megawatts of wind power on the west coast of Sri Lanka. The proposed wind plants with installed capacity of 34 megawatts would produce about 1 percent of total power generation in Sri Lanka.

Commercial developers sought the assistance of USAID’s SARI/Energy program to finance the early stages of wind development in Sri Lanka. SARI/Energy promotes energy security in South Asia through cross border energy trade, energy market formation, and regional clean energy development. Through the regional program, USAID provided information about banks in India who have had experience financing wind projects in India. One of these banks has since agreed in principle to finance a wind project in Sri Lanka, as has the Asian Development Bank.

The four commercial wind developers who signed the Letters of Intent are proceeding with projects worth approximately $60 million and are carrying out activities in preparation for signing a Power Purchase Agreement.