The government has tabled a new amendment to the Sri Lanka Electricity Act, introducing a significant change that requires the Public Utilities Commission of Sri Lanka (PUCSL) to consult the Ministry of Finance when determining electricity tariffs. This shifts the regulatory landscape, modifying a clause in the 2024 Electricity Act that gave PUCSL sole authority in tariff setting.
The Sri Lanka Electricity (Amendment) Bill, 2025, redefines structural elements of the power sector, including the removal of provisions establishing a National Electricity Advisory Council, which was initially created to support policy development across generation, transmission, and distribution. In its place, the Minister may now appoint a committee, a shift that raises concerns about transparency and long-term policy planning.
Another key change is the restructuring of the Ceylon Electricity Board (CEB). Previously, its generation functions were to be split among four companies handling hydro, coal, oil, and wind. The amendment proposes launching one generation and one distribution company, with CEB employees reassigned accordingly. Both entities will be 100% government-owned, including the transmission company, reversing the earlier plan for shared public-private ownership.
Analysts argue this full government control could deter private sector investment, especially when compared to countries like India and Bangladesh, where transmission companies have listed shares to attract capital.
Furthermore, Leco, previously an independent player, will become a subsidiary of the new distribution company, raising concerns about its operational autonomy.
The bill also revises provisions related to decarbonization, renewable energy, and grid integration, key pillars of the 2024 Act that aligned Sri Lanka’s energy sector with international environmental commitments.
Critics warn that while centralization may bring efficiency in the short term, it risks politicizing power sector decisions and discouraging essential investment in clean energy and infrastructure development.
