Sri Lanka’s new govt reverses key economic reform for IMF bailout

Colombo: The new National People’s Power (NPP) government in Sri Lanka on Tuesday announced its first reversal of a key element in the ongoing IMF bailout programme concerning the loss-making state-owned enterprises.

The government reversed the Electricity Act, approved in June this year under then-president Ranil Wickremesinghe’s government, introducing major reforms to the state power entity Ceylon Electricity Board (CEB).

The Marxist NPP trade unions had then agitated against the bill.

A CEB trade union leader who led the agitation is an NPP candidate in the parliamentary election scheduled for November 14.

A CEB statement on Monday said the entity’s privatisation programme would be scrapped and vowed to amend the CEB Reforms Act

of 2024.

It said there would be no privatisation of state-owned power plants, transmission and distribution processes.

The CEB Reforms Act of 2024 paved the way for private sector competition in power generation.

The move was aimed at easing the burden on public finances and increasing the share of renewable energy to 70 per cent by 2030.

The CEB reforms aimed at minimising losses to the treasury was a key commitment made by Sri Lanka to the IMF in the near $3 billion bailout sealed in 2023.