CEB at crossroads: Reform reversed, financing jeopardised

Sri Lanka's electricity sector stands at a crossroads.

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The 2024 Act offered a path toward modernisation, private investment, and fiscal sustainability. The 2025 amendments reflect a retreat into familiarbut flawed territory. This is not a debate between privatisation and public ownership. It is a question of whether Sri Lanka can deliver reliable, affordable, and sustainable power in a constrained fiscal environment. Whether ideology will trump pragmatism. And whether the CEB can survive without the very reforms it is resisting.

THE stakes are high. Electricity is not just a utility, it is the backbone of economic recovery, industrial growth, and climate resilience. Sri Lanka cannot afford to get this wrong.

Over the past two years, Sri Lanka's electricity sector has transitioned from a period of reform-driven ambition to reverting to centralisation. The Ceylon Electricity Board (CEB)-long burdened by inefficiency, debt, and political inertia-was poised for transformation under the 2024 Electricity Act No. 36. But the 2025 amendments passed by the National People's Power (NPP) Government have reversed course, reasserting state control and raising urgent questions about the sector's future viability.

The CEB is a massive corporation with 2024 revenues of Rs. 547 billion (~$ 1.8 billion). It rivals corporate giants like MAS, Brandix, Hayleys and John Keells. But, until IMF Extended Fund Facility (EFF) program imposed a requirement for cost reflective tariffs, CEB was frequently loss making with cumulative losses from 2004 to 2024 of about Rs. 427 million (see Figure 1).

But this is not just a story about electricity or a large public sector corporation. It's about a crucially important energy source. It is about whether Sri Lanka can modernise its infrastructure, attract investment, and deliver reliable, sustainable and lower cost power without repeating the mistakes of the past.