Govt. clarifies electricity pricing amid IMF reforms

Reaffirms commitment to cost-reflective electricity tariffs, aligning with key IMF structural benchmark

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■ Deputy Ministers Dr. Anil Jayantha Fernando and Dr. Harshana Suriyapperuma clarify Govt's focus on long-term reform and institutional sustainability

■ Assert cost-reflective formula already agreed upon, but quarterly implementation faces data and timing challenges

■ Aim to avoid short-term borrowing and preserve cleaned-up CEB balance sheet

■ Emphasise PUCSL's independence with no Govt. interference in tariff decisions

■ IMF Mission Chief for SL Evan Papageorgiou acknowledges pricing mechanism is not functioning fully, calling for prior actions to ensure cost coverage

THE Government yesterday reaffirmed its firm commitment to cost-reflective electricity tariffs, a key structural benchmark under the International Monetary Fund (IMF) program.

Addressing the media Labour Minister and Economic Development Deputy Minister Dr. Anil Jayantha Fernando and Finance and Planning Deputy Minister Dr. Harshana Suriyapperuma clarified that Sri Lanka is not only complying with IMF requirements, but also reshaping institutions and policies for long-term sustainability.

Dr. Fernando explained that while a costreflective formula has already been agreed upon, its full implementation has lagged.

"We have already agreed to the initial structural benchmark. But this is not a one-off. It is a continuous benchmark, reviewed every quarter. Electricity is generated from various sources and the cost of each varies depending on weather pat terns. We use a formula that adjusts based on past profits and future estimates, but applying it quarterly as agreed has proven challenging especially to collect and forecast data," he added.