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Sri Lanka’s energy crossroads: From crisis to clean powerhouse

Daily FT

|

August 20, 2025

A nation running on borrowed power

- By Hiran Daluwatta

Sri Lanka’s energy crossroads: From crisis to clean powerhouse

AT 7:15 p.m. on a humid April evening in Colombo, the lights flickered twice, then died. Across the city—from Wellawatte to Wattala—families scrambled for candles and battery-powered fans. The blackout lasted only an hour, but it was a stark reminder of Sri Lanka’s energy fragility.

In 2024, Sri Lanka spent over $ 2 billion importing coal, oil, and gas to keep the lights on. Fossil fuels still power more than 60% of our electricity, despite vast untapped renewable resources. Meanwhile, power generation emits over 10 million tonnes of CO₂ annually, accelerating climate change and threatening both our economy and food security.

We stand at an inflection point: modernise and transition to clean energy at scale — or continue spiralling into higher costs, environmental damage, and unreliable power.

Why the stakes are so high?

It should be noted with all seriousness that Sri Lanka’s dependence on fossil fuel imports is a triple threat to:

Economic stability: Fuel imports consume up to 30% of export earnings in volatile years.

Food security: Climate shifts have already caused paddy yields to fall by 10-15% in drought years.

Health and environment: Air pollution from coal plants contributes to respiratory diseases, and greenhouse gases intensify extreme weather events.

According to the International Renewable Energy Agency (IRENA), island nations like Sri Lanka face disproportionate risks from delayed energy transitions, making urgent reforms critical.

The land question

Sri Lanka’s total arable land is just over 2 million hectares, a finite resource critical for both food and energy production. Covering fertile land with single-use solar or wind farms is neither sustainable nor politically feasible.

The future lies in dual-use solutions that maximise land productivity:

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