Colombo, Sri Lanka – The Ceylon Electricity Board (CEB) has recorded a Rs. 3.0 billion operating loss in the December 2024 quarter, raising concerns over Sri Lanka’s ability to meet its financial commitments under the IMF agreement.
According to the latest financial reports, the CEB’s revenue dropped by 28%, falling from Rs. 156.2 billion to Rs. 111.8 billion, while cost of sales surged by 49% to Rs. 116.2 billion. This resulted in a gross loss of Rs. 4.49 billion, a notable decline from Rs. 78 billion in 2023.
Despite receiving inter-monsoon rains in 2023, which helped lower generation costs, selling prices remained high. The CEB partially covered Rs. 9.8 billion in administrative expenses with other income and profit of Rs. 11.3 billion, but ultimately reported an operating loss of Rs. 3.0 billion. Additionally, it received financial income of Rs. 3.6 billion, though it remains unclear whether this includes foreign exchange gains.
For the full year ending December 2024, the CEB reported a profit of Rs. 144 billion, which included a foreign exchange gain of Rs. 11.7 billion, attributed to rupee appreciation, and a capital gain of Rs. 26 billion.
Concerns have emerged over Sri Lanka’s electricity tariff policies, as the Public Utilities Commission cut fuel and electricity tariffs by 20% in January, leading to missed structural benchmarks under the IMF program. The IMF has warned that Sri Lanka must address forward-looking pricing mechanisms and return to profitability to pass its next review.
As the country enters the first-quarter dry season, increased thermal power generation costs could further strain finances. However, the expansion of rooftop solar power is expected to mitigate fuel dependency and reduce operational losses.
The outcome of the next IMF review will be crucial in determining whether the CEB can regain financial stability, as continued losses could place Sri Lanka’s economic recovery efforts in jeopardy.
