PHOTON International The Photovoltaic Magazine

World Bank may provide $25 million for Sri Lanka renewables project

The World Bank is set to consider a new renewables project in Sri Lanka in June, with about a third of the funding going to help off-grid residents buy solar home systems (SHS).

	© SELCO-Sri Lanka
Building up: SELCO employees put a solar home system in place on a Sri Lankan home.

The Renewable Energy for Rural Economic Development (RERED) program provisionally would provide $21 million in long-term, zero-interest credit funding for SHS through the World Bank's International Development Association (IDA) and a $3.9 million Global Environment Facility (GEF) grant, says Jayantha Nagendran, senior vice president of asset/liability management at the Colombo- based DFCC Bank. If approved, credit financing might be available as early as September.

Nagendran is also manager of the Energy Services Delivery Credit Project (ESD), a joint World Bank/Sri Lanka project started in 1997. He expects it will have been responsible for 25,000 SHS installations, through credit financing and a $100 subsidy on systems above 30 W, by the time it ends in December. During the ESD project, the government of Sri Lanka reduced import duties on PV components from 35 to 10 percent.

But as effective as ESD has been in getting a solar market going in Sri Lanka, it could do better, says Neville Williams, CEO of the Chevy Chase, US-based Solar Electric Light Company (SELCO). The local subsidiary SELCO-Sri Lanka, which he claims has 44 percent of the island's solar business, has been hampered by a credit financing system that has delayed repayments by as much as seven months. »Ironically, what appears to be a successful program to the World Bank could result in putting all the [PV] companies out of business. Maybe RERED will address some of those problems,« says Williams.