Renewable energy dues of nearly Rs. 10 billion remain unpaid, pushing Sri Lanka’s clean power developers into severe financial strain.
Renewable energy dues of around Rs. 10 billion remain unpaid, placing Sri Lanka’s clean power sector under severe financial pressure, the Federation of Renewable Energy Developers warned today.
The Federation of Renewable Energy Developers, known as FRED, called for urgent government intervention after prolonged payment defaults by the National System Operator (Pvt) Limited for electricity already supplied to the national grid.
According to FRED, payments to renewable energy developers have reportedly been suspended since December 2025. Outstanding dues have now reached approximately LKR 10 billion.
The concerns were raised at a press conference hosted by FRED at the Ground Floor Auditorium of The Ceylon Chamber of Commerce. Renewable energy developers and key industry stakeholders attended the event to highlight the scale of the crisis.
The Federation said the issue has serious implications for energy security, investor confidence, employment, and the wider financial system.
According to FRED, the payment delays are affecting close to 400 small and medium-scale renewable energy developers and entrepreneurs. These developers operate across ground-mounted solar, mini-hydro, wind, biomass, and other renewable energy segments.
The affected capacity exceeds 1,000 MW. FRED said the crisis covers 389 plants with a combined installed capacity of 1,073.9 MW.
The Federation noted that renewable energy developers have continued supplying power to the national grid despite the suspension of payments. However, this has placed heavy pressure on working capital, debt servicing, plant maintenance, and salaries.
FRED warned that continued non-payment could lead to rising non-performing loans in the banking sector. It could also disrupt renewable energy operations and gradually reduce the country’s available clean power capacity.
The Federation also raised concerns over the prioritisation of payments for thermal power generation while renewable energy developers remain unpaid.
It said the cost of thermal generation has increased sharply, while renewable energy producers, who provide comparatively lower-cost and cleaner power, are now facing serious liquidity constraints.
FRED stated that the situation has broader consequences beyond the renewable energy industry.
If left unresolved, the crisis could weaken investor confidence in future renewable energy tenders, increase the perceived risk of investing in state-linked energy projects, and undermine Sri Lanka’s long-term clean energy targets.
The Federation called on the Government of Sri Lanka, the Ministry of Finance, the General Treasury, and all relevant authorities to take immediate action to settle the outstanding payments.
It urged Treasury intervention, allocation of funds specifically for renewable energy developer payments, and a Cabinet-level directive to speed up financial solutions before the sector faces widespread defaults.
FRED emphasized that timely payment for electricity already supplied is essential to maintain operational continuity across the renewable energy sector.
It also said the livelihoods of technical staff, engineers, electricians, mechanics, administrative employees, and other workers connected to the industry must be protected.
The Federation reaffirmed its willingness to work with the government and relevant institutions to support a stable and sustainable energy future for Sri Lanka.
However, it stressed that immediate financial relief is necessary to prevent further deterioration of the sector and to protect the country’s renewable energy capacity.
