Category: Daily Financial Times

US Ambassador Eric Meyer yesterday presented his credentials to President Anura Kumara Dissanayake, marking the formal commencement of his ambassadorial tenure.

Following the ceremony, Ambassador Meyer said: ‘It was an honour to present my credentials to President Dissanayake. The United States is proud to call Sri Lanka a friend in a partnership that has spanned more than 78 years.

I look forward to further strengthening the US-Sri Lanka relationship and unlocking new economic opportunities, deepening our security cooperation, and advancing a free, secure, and prosperous Indo-Pacific.’

Meyer arrived in Colombo on the evening of 22 August, to assume his duties as the 29th United States Ambassador to Sri Lanka. Prior to his assignment in Sri Lanka, he served as Chargé d’Affaires, a.i., at the US Mission to Norway and, before that, as Senior Bureau Official for the Bureau of South and Central Asian Affairs at the Department of State.

HNB Finance PLC has announced the appointment of Dr. Prasad Samarasinghe as Chairman with effect from 28 August 2026, succeeding Rajive Dissanayake, who will retire on the same date following nine years of distinguished service.

Dr. Samarasinghe brings nearly three decades of senior-level experience spanning information technology, telecommunications engineering, cybersecurity, digital infrastructure, enterprise systems, corporate governance, risk management and regulatory oversight. He has held senior executive and board-level positions across the banking, telecommunications, technology and corporate sectors.

He holds the globally recognised Certified Information Systems Security Professional (CISSP) and Certified Cloud Security Professional (CCSP) certifications, together with the CPA qualification from CPA Australia. He is also a Distinguished Member of CPA Australia, with his professional qualifications and experience spanning cybersecurity, technology risk, financial management, governance and strategic decision-making.

Dr. Samarasinghe holds a Ph.D. in Telecommunications from The Australian National University, Canberra, a Master of Engineering (MEng), and a Bachelor of Science (BSc) in Electronics and Telecommunications Engineering with First Class Honours from the University of Moratuwa.

He joined the Board of HNB FINANCE in February 2024 as a Nominee Director of Hatton National Bank PLC and His board responsibilities have included oversight of technology, procurement, audit, integrated risk management, related-party transactions, strategy and investments, and credit.

He has served on the Board of Hatton National Bank PLC since July 2019 and is also a Director of Hayleys Fibre PLC and Chemanex PLC. He has also held significant public sector and regulatory positions, including serving as a Member of the Insurance Regulatory Commission of Sri Lanka.

His appointment brings to the Chairmanship of HNB FINANCE a broad combination of financial, technological, governance and regulatory expertise at a time when digital transformation, cybersecurity, risk management and regulatory compliance are increasingly shaping the future of the financial services industry.

The Bar Association of Sri Lanka (BASL) has raised the question of whether the proposed extension of the tenure and related benefits of sitting superior court judges under the 22nd Amendment to the Constitution could amount to a ‘gratification’ within the meaning of the Anti-Corruption Act.

The concern was raised in a Special Determination petition filed before the Supreme Court by BASL President Rajeev Amarasuriya and Secretary Nalin De Silva challenging the constitutionality of the proposed amendment.

The petitioners said a serious question arises as to whether the extension of tenure and attendant benefits proposed for sitting judges could constitute a ‘gratification’ under the Anti-Corruption Act No. 9 of 2023, as amended.

The BASL said the issue assumes significance because the same judges may be required, in their judicial capacity, to determine the constitutionality of the Bill that seeks to extend their tenure.

However, the petitioners stressed that they were not alleging wrongdoing or casting aspersions on the judges. They said the provisions of the Anti-Corruption Act were cited to draw the Supreme Court’s attention to the risk of public perception arising from the circumstances.

The petitioners also acknowledged that it could be argued that legislative and judicial acts are immune from the application of the relevant provisions of law.

The BASL referred specifically to Section 93(b) of the Anti-Corruption Act, which covers Supreme Court and Court of Appeal judges, among others.

The provision states that a Supreme Court or Court of Appeal judge, judicial officer or other person exercising judicial or quasi-judicial powers who solicits or accepts any gratification as an inducement or reward for doing or refraining from doing an act in their judicial capacity commits an offence of bribery.

According to the provision cited in the petition, a person convicted of such an offence may face a fine of up to Rs.1 million and rigorous imprisonment for up to seven years.

The BASL has also raised a potential conflict-of-interest issue, arguing that sitting Supreme Court judges determining the constitutionality of the Bill could themselves benefit from the proposed extension of tenure.

The petitioners are seeking a declaration that the proposed 22nd Amendment requires approval by the people at a referendum, arguing that the Bill affects the independence of the Judiciary and the sovereignty of the people.

The BASL has also requested the Chief Justice to constitute a Full Bench comprising all sitting Supreme Court judges to hear the matter, citing what it described as grave, exceptional and urgent constitutional issues arising from the Bill and an alleged conflict of interest.

The Bill, published in the Gazette on 7 August and placed on Parliament’s Order Paper on 18 August, proposes to increase the retirement age of Supreme Court judges from 65 to 67 and Court of Appeal judges from 63 to 65.

It also proposes a separate provision for the Chief Justice, who would retire upon reaching 67 or completing six years from appointment as Chief Justice, whichever occurs first.

The proposed amendment would also increase the maximum number of other Court of Appeal judges from 19 to 24, allowing five additional judges to be appointed.

According to the petition, extending the tenure of sitting judges could create both actual and perceived risks to judicial independence because those judges would receive another two years in office together with the associated salary, privileges and benefits.

The BASL further argues that the arrangement could affect public confidence in the Judiciary, as subsequent judicial decisions involving the Government could be viewed against the perception that sitting judges had benefited from a tenure extension granted through the constitutional amendment.

Two youngsters in their twenties Pasindu Sooriyabandara (26) and Sonal Dinusha (25) led Sri Lanka’s fight back in the second Test against India on another rain-truncated day at the SSC grounds yesterday.

Both batsmen struck eighties apiece that saw Sri Lanka end the third day on 265-8 in reply to India’s 503-9 declared. Sri Lanka trail India by 238 runs and require a further 39 runs to avoid the follow-on.

Sooriyabandara, who made his Test debut as a concussion substitute in the Galle Test, looked solid when he walked out to the middle. He added 87 with Kamindu Mendis (32) before the partnership was broken on the stroke of lunch. Another brief partnership followed between Sooriyabandara and Dinusha, but Ravindra Jadeja struck to dismiss Sooriyabandara for 80 (133 balls, 9 fours). Dinusha continued from where he left off in Galle and completed his third 50-plus score in as many innings. He looked the best batter on display, handling both pace and spin with little trouble. Keshara Nuwantha (18) and Lahiru Kumara (8*) supported him down the order in partnerships of 57 and 35*. Sri Lanka are not yet out of the woods. India took the second new ball and will look to wrap up the final two wickets quickly today.

Sri Lanka started the day positively, with Kamil Mishara picking up a few boundaries off Prasidh Krishna, but the Indian pacer had the last laugh as he bounced out the debutant. Sooriyabandara and Kamindu carried on with the positive intent, keeping the scoreboard moving and putting some pressure on the Indian bowlers. Saransh Jain, the first spinner introduced, failed to make an impact, while Manav Suthar also struggled for consistency conceding runs. The pair added 87 at a good rate, forcing Indian captain Shubman Gill to turn back to his pacers. Krishna, who was the pick of the Indian bowlers returned to break the partnership by removing Mendis who pulled the ball straight into the hands of mid-wicket. A compulsive player of the pull and hook shots, India exploited that to dismiss Mendis.

Sooriyabandara completed his maiden Test fifty off 76 balls and looked in good touch going to lunch unbeaten on 65.India tightened the grip on the game in the afternoon session when they picked up three wickets. Dhananjaya de Silva fell to Suthar early on, before Dinusha and Sooriyabandara put together a handy partnership. Just as Sooriyabandara began to settle in, Jadeja returned into the attack and broke the stand. Niroshan Dickwella did not last long. Mohamed Siraj strangled him down the leg side for a duck. With Sri Lanka seven down, Dinusha and Keshara Nuwantha showed plenty of resilience to frustrate the Indian bowlers. Dinusha using his feet effectively against the spinners notched up his fifty off 82 balls to remain unbeaten on 85 at the close having faced 137 balls and hit six fours and two sixes. Nuwantha looked solid in defence batting for 82 minutes before he fell to Suthar, but the partnership helped Sri Lanka trim the deficit to an extent although it is still a long way to go.

The Government is moving to establish a National Business Facilitation Centre under the Presidential Secretariat, with the aim of breaking down fragmented approval processes and giving investors a single high-powered mechanism to navigate the State machinery.

The Cabinet of Ministers approved the establishment of the Centre on Monday to facilitate investors and coordinate State agencies, while providing a mechanism with sufficient authority to address administrative barriers and improve policymaking in the industrial sector.

Cabinet Spokesman and Minister Dr. Nalinda Jayatissa stressed that the initiative was not intended to replace the Board of Investment (BOI), but to strengthen coordination among the numerous State institutions involved in approving and facilitating investments.

‘At present the investors do most of their work in running into many State organisations and BOI also cannot do it alone,’ he said at the weekly post-Cabinet media briefing yesterday.

The move seeks to address a longstanding structural problem in Sri Lanka’s investment environment, where a single project can require approvals from multiple agencies operating with limited coordination and overlapping mandates.

Investors frequently face delays in securing land, environmental approvals, regulatory licences, electricity and water connections, as well as banking and financing facilities, according to the Cabinet proposal.

The Government has identified the fragmentation of these processes as a key impediment to domestic investment, with administrative delays discouraging entrepreneurs and slowing the commencement of projects.

The proposed Centre is therefore expected to function as a single coordinating mechanism, guiding investors through the approval process while bringing relevant State agencies into a more integrated framework.

‘Importantly, the Government intends to give the new institution greater authority to coordinate agencies and identify policy and administrative bottlenecks, rather than simply creating another layer of bureaucracy,’ he explained.

Dr. Jayatissa said the Centre would also draw on expertise from outside the conventional public service, with plans to recruit private sector specialists, experienced public officials and other professionals on a contractual basis.

The proposal to this effect was submitted by President Anura Kumara Dissanayake.

Those living in an abyss will not easily comprehend the true reality of their existence.

When the abyss is societal, when that society’s ways and habits are accepted as a norm, when its narration is endlessly self-affirming, comprehension of the human condition therein becomes extremely challenging.

The societal abyss entraps its inmates in an endless maze. Knowing no better, they praise it, finding virtues in its permanent atrophy, heavy air, corrosive texture and the deadening sounds. Time does its work; soon the abyss becomes them, they become the abyss.

The NPP promised a brave new world, a new era, a leap from the realm of a failed system to a realm of success.

An extremely challenging undertaking, perhaps an overreach, biting more than what a people can chew.

There is nothing in Sri Lanka’s preceding eighty years to show that we are capable of achieving the sanguine ambitions of the NPP. For a poor country to reach a rich status needs more than speech-making or passive contemplation of the universe. Words are all we have; that is what we are good at. At the ground level, a reality of a vulnerable economy producing only the barest products, limited resources, inefficient systems, a productivity level below world averages, deep-rooted corruption and an indifferent workforce ignorant of real value-adding. To understand what the world really thinks of us, one has only to present his Sri Lankan passport at an embassy; the disregard is sobering.

For the abyss mindset, a leap is not grandiose enough if it carries no new constitution. (The disgraced President Gotabaya Rajapaksa was also working on a new constitution when events overtook his ambitions.) This ambition faces a piquant challenge: nearly every new Government is elected with a mandate from the people to change the constitution, but the existing constitution says you need a referendum (endorsement from the people), in addition to two-thirds in parliament, to change it. If a new constitution is eventually adopted, it will be the fourth since independence, the last three being autochthonous. The existing constitution is commonly condemned; only its inbuilt rigidity prevents its jettisoning. Clearly, making lasting constitutions is not one of our skills.

Considering the enormity of the Government’s undertaking, it would surprise a dispassionate observer that the first amendment to the constitution contemplated by the NPP Government is to increase the retirement age of judges of the superior courts by two years (65 to be made 67), an inessential, academic issue.

Curious aspects

Apart from the suggestion of an ‘extempore’ approach, there are several aspects to this move which are curious.

It is commonly said that there are more than one million cases pending in our courts and that we need the experienced judges who have reached the age of 65, still in sound mind and body, for two more years in service to attend to these delayed cases. (The backlog is in the lower courts; the extension of the term is for the judges in the superior courts.) Arguably, although a judge may not be individually responsible for the enormous backlog, they work within a system which created this massive stockpile of cases in the first place. I cannot imagine the same reasoning, ‘you broke it, you fix it’, being accepted in any other service sector. They would look for another solution.

In our social discourse, there is an exaggerated respect for age (experience), no doubt readily encouraged by the venerable seniors. That age equals wisdom is at best a doubtful proposition. It is difficult to conceive of a judge who has sat on the Bench, say, for fifteen years, and is now 55 years of age, acquiring much more wisdom in the next 10 years. What the rest of the world may call a slow learner, to us is a man acquiring experience! If the logic of age equating wisdom is applied in the political field, for the failed politicians hoary with age, happy times of globetrotting are here again!

Administering justice is not like a sausage factory. In order to reduce the backlog, a judge cannot indiscriminately dismiss all the cases before him. Sometimes an injustice may not even appear in the initial pleadings but might emerge in the course of a hearing by an intelligent judge. A witness does not give evidence with robot-like perfection. Proceedings in a court of law are designed for thoroughness, rather than speed.

The usual culprits for the law’s delays are well known and have been talked of for nearly five decades now. Lack of infrastructure and personnel shortages in the relevant departments are often referred to.

Although not stated commonly, there are not-so-visible factors contributing to the delays too. Laws that are ill-thought-out and badly drafted contribute towards endless litigation. This applies to both substantive as well as procedural laws. Many of the processes prescribed by our laws create loose ends, leading to confusion and eventual litigation. It appears that the laws introduced by our legislators have only confounded a confused reality; our legislators do not have a reputation for good law-making (all the nutritious food served at the parliament canteen to no avail!).

There is the issue of incompetence; many cases end up in appeals, and successfully too. If the law is clear and the matter is heard competently, much time can be saved. There is no reason to believe that our courts are better or worse than other segments of society.

Sri Lankans could be considered litigious by nature. Just observing their road manners, drivers jostling for every advantage, gives an idea of what goes on in courts: bad laws and primal temperaments.

We cannot even understand a queue.

Dignitaries eat first!

Mimicry

When talking about the legal system or the judiciary, it strikes us that everything we have, the very essence-the form, the substance, the ideas of law-belongs to other cultures. Many human rights and liberties we take for granted today are the results of work done in foreign courts by foreign judges. These are very unlike cultures and peoples; they are societies deeply individualistic, committed to a high work ethic and a people vigorous in nature, disciplined and carrying different social standards and norms.

What we have is a mimicry acted out in an unlike setting; does it carry authenticity?

The adopted legal system has been planted in a culture fashioned by centuries of feudal servitude. In the originating countries, courts are simply ‘courts’, and judges are simply judges, Judge ‘Smith’ and so on. But in Sri Lanka, one dares not such egalitarian straightforwardness. Even a casual reference to a court or a judge will carry the obligatory title ‘Garu’ (honourable). There is a strong suggestion of fearfulness or nervousness, like when dealing with an unpredictable and fussy village big shot, unwise to fall foul of. One is reminded of Robert Knox’s description of the lives of the humble folk of the Kandyan Kingdom in the 17th century; their abject fear of the feudal authority, placating them by word at every opportunity.

Likewise, the ‘Garu’ is a prefix with the politicians too. However, here there is no fear, only a customary beseeching of a patron. The true nature of this interaction is seen now in perspective, as these ‘honourable’ politicians are unmasked in steady succession for their corruption.

Western legal thinkers have described the judiciary as the least dangerous arm of Government. A justifiable proposition; legal practitioners are usually men of the world, urbane and learned. By the very nature of their occupation, they are committed to a search for legal justice. Even to a man convicted of a serious crime, the courts extend every legal courtesy: a fair hearing and, if found guilty, a reasonable, uniform and proportionate punishment. It can be said that the process of the law is a civilising process.

Undoubtedly, there have been aberrations in judicial history; however, the law’s impetus is towards greater liberality, transparency and fairness.

One must not make the mistake of thinking that the mere existence of a judiciary guarantees our freedoms and rights. The judiciary is also a career for a lawyer. Judiciaries exist even in ‘rogue’ States; we have heard of judiciaries in countries like Pol Pot’s Cambodia and Idi Amin’s Uganda. There are legal proceedings in North Korea and Afghanistan. Whether these proceedings accord with universally accepted legal norms is extremely doubtful.

Even today’s developed societies are not without their dark judicial histories. We have the notorious example of Judge Roland Freisler, Adolf Hitler’s President of the People’s Court. Lawyer Freisler was initially a member of Germany’s Communist Party and later became an ardent Nazi. In July 1944, a group of idealistic German army officers, appalled by the disaster awaiting their country as a result of Hitler’s war, made an attempt on Hitler’s life at his headquarters in East Prussia. The assassination attempt failed, and several conspirators were brought before Judge Freisler in a mock trial. Behind the judge’s seat in the courthouse was a large bronze bust of Adolf Hitler. Freisler harangued and abused the helpless accused and reiterated that he would judge them in the same manner Hitler himself would have (for attempting to assassinate him)!

Our lawyers, from whose midst our judges have emerged, think that the offer of an extension of two years of additional service will be too tempting an inducement, seriously undermining a judge’s capacity for independence (know thyself is an old Greek maxim). Some argue that even if judges, despite the lure, walk the straight and narrow path, the test of independence is objective and must be seen to be so.

But then in the abyss, appearances are never what they seem; everything is helter-skelter.

The governance landscape continues to evolve as jurisdictions around the world balance local needs while navigating increased global competition. Advancing this field requires strong commitments to international alignment and cooperation on AI governance, centred on safety and fair risk assessment.

Recognising the strategic implications of AI for both economic prosperity, national security, and accelerated investments in domestic AI infrastructure have begun to foster a more competitive international environment. However, international trade and global cooperation remain crucial for realising the economic benefits of AI while effectively managing its risks.

To address these emerging risks, governance must take precedence over data-driven technology deployment. With the unprecedented growth of technology and the integration of Artificial Intelligence (AI) into every facet of daily life, new opportunities have emerged for informed efficient decision-making.

However, a robust regulatory framework is vital to align technological trajectory with public expectations and control. Most countries are still in the early stages of developing these frameworks as they weigh and calibrate the benefits and risks of technological innovation. As historians have noted, in the absence of such standards, humans are being redefined not as “mysterious souls,’ but as ‘hackable animals’ and once compromised, can easily be engineered without their knowledge – posing danger and risks.

Applications, opportunities, and risks

Data science and AI are transforming social behaviour and reshaping comparative policy analysis-a systematic research approach that examines similarities, differences, and policy effectiveness across countries, regions, or time periods. Since the mid-twentieth century, this field has shifted from speculative theory to pervasive infrastructure. AI has emerged as a transformative technology, driving major changes across public administration, public policy, and soritical life.

The rapid advancement of data-driven technologies has revolutionised the theory and practice of comparative public policy across State, the public, and private enterprises. However, governance and final decision-making must remain within the domain of human executives rather than relying solely on AI predictions. Although machine learning enables automated cognitive problem-solving, ultimate accountability still rests with executives and administrators.

Governance enabled by AI

Algorithmic systems are rapidly gaining popularity and are now extensively used in decision-making processes, particularly in the finance industry. However, shifting from human to algorithm-based decision-making is sometimes viewed as relinquishing accountability and passing blame when failures occur.

Every decision-whether made by technology, AI, or humans-carries a probability of risk based on the data volume used. To minimise these risks, regulatory frameworks must be carefully constructed to address societal needs. Mapping the evolving AI governance landscape requires country profiles that examine how different nations develop, regulate, adopt, and govern AI capabilities across their public sectors. Rather than building systems from scratch, jurisdictions should utilise globally available research and standardised frameworks.

Each country profile should offer an overview of the jurisdiction’s regulatory approach, highlighting high-level principles, definitions, policy initiatives, and standardisation systems. These profiles encompass legal instruments, national strategies, and public investments. Developers must focus on harmonising international standards to enable seamless, low-risk global integration.

Public policy framework for AI and data-driven technology

Public policy covers laws, regulatory measures, funding priorities, and guided actions enacted to address public issues. The ongoing evolution of AI offers substantial benefits alongside real risks to policy formulation. Growing interest among academics and practitioners is driving real-world data into mathematical models that assess complex societal challenges. AI and data-driven applications open new avenues for enhancing public policy processes, enabling faster and more precise responses.

In the policy-setting process, identifying and framing public problems is essential to garnering public and political support. Input is drawn from media narratives, public opinion, and advocacy groups. For instance, controversial policy moves-such as the Sri Lankan Government’s proposal to increase the retirement age of Supreme Court judges-demonstrate how public policy decisions can be viewed as unethical or indicative of authoritarian overreach.

Regulatory approach to AI

The European Union has advanced its AI regulatory framework around three overarching objectives: boosting AI uptake across the economy to strengthen technological capacity, addressing socio-economic challenges, and developing an ethical and legal framework for trustworthy AI. This creates an environment that supports safe, lawful innovation. Building effective AI frameworks requires ensuring data governance, data quality, traceability, technical documentation, transparency, accuracy, security, and-most importantly-human oversight.

Adoption of AI by countries in 2026: Key insights and trends

A report in Sri Lanka’s Daily Mirror noted that 81% of Sri Lankans now use AI instead of traditional Google searches. While surprising, this shift primarily reflects consumer behaviour rather than public sector governance.

Conclusion

AI systems and their outcomes are machine-based, operating with varying degrees of autonomy by inferring patterns from manually entered or scraped datasets. Consequently, comprehensive rules tailored to local market and State conditions are necessary. Relying on imported datasets and external inferences may not suit local contexts.

Because Sri Lanka is in the early stages of AI deployment, it should seek guidance from jurisdictions that have already established legal and regulatory frameworks, such as the EU. The EU released its “Knowledge4Policy (K4P)” dataset in 2018 to establish a trustworthy foundation for AI applications. By contrast, Sri Lanka’s foundational dataset, Lanka Data Net (LDN), emerged in early 2026 and remains premature for deriving complex public policy outcomes. Without robust local datasets, Sri Lanka is not yet ready to base core public policy on AI predictions, though standard applications may be used with strict human oversight. Has Sri Lanka fully equipped with relevant skillsets and international exposure to fast track AI development especially in public policy domain or continue political manoeuvring?

Although AI development is driven by mathematicians and software engineers, administrators, legal professionals, and finance executives often dominate implementation and decision-making. Engineers should play a central role in ensuring system trustworthiness, safety, and operational accountability. Because AI can compute risk probabilities with high mathematical certainty, technical governance should remain heavily guided by technologists rather than solely administrative personnel.

This dynamic recalls the privatisation era under British Prime Minister Margaret Thatcher and the US President Ronald Reagan, where corporate boards became dominated by legal and financial professionals with minimal engineering representation. That structure contrasted sharply with Germany’s governance model for State-managed and industrial institutions, which emphasised technical expertise to maintain global competitiveness.

Sri Lanka is placing battery storage at the centre of its next phase of renewable energy expansion, with the Public Utilities Commission of Sri Lanka (PUCSL) approving a new three-tier feed-in tariff structure, while requiring the electricity system to add at least 450 MW of solar photovoltaic (PV) capacity paired with battery energy storage by March 2027.

The new tariffs, effective from today (25) through 24 February 2027, are designed not only to remunerate renewable power producers but also to address an anticipated capacity shortage in the first quarter of next year.

The National System Operator (NSO) has been directed to ensure that at least 450 MW of solar PV with Battery Energy Storage Systems (BESS) is added to the system by March 2027, with sufficient capacity available to meet peak demand and avoid scheduled power interruptions arising from capacity shortages.

The tariff decision also places a firm cost discipline on existing battery-storage procurement.

The NSO must ensure that the per-unit cost of the already offered 160 MW of BESS does not exceed Rs. 20/kWh on a monthly average basis. Any cost above that threshold will not be recognised, recovered, or allowed under the end-user electricity tariff.

The move represents a significant shift in the structure of renewable power incentives, with higher tariffs being offered where storage can help make intermittent solar generation more dispatchable.

For standalone renewable power plants, the approved tariff components vary substantially by technology. Mini-hydro has a non-escalable component of Rs. 30.37/kWh and an operation and maintenance (O and M) component of Rs. 4.50, while wind has Rs. 20.80 and Rs. 4.93, respectively.

Ground-mounted solar has a non-escalable component of Rs. 18/kWh and an O and M component of Rs. 2.72, while floating solar receives Rs. 23.58 and Rs. 3.92, respectively.

Biomass tariffs incorporate fuel-price components, taking the effective 2026 components for dendro biomass to Rs. 31.20/kWh and agricultural/industrial waste to Rs. 17.80/kWh, in addition to their non-escalable and O and M components.

The tariff structure becomes markedly more attractive when battery storage is incorporated. For power plants with BESS, ground-mounted solar receives a feed-in tariff of Rs. 47.08/kWh during prioritised feed-in periods, comprising a non-escalable component of Rs. 44.06 and O and M of Rs. 3.02. At other periods, the tariff is Rs. 20.72/kWh.

Floating solar with BESS commands an even higher prioritised-period tariff of Rs. 53.28/kWh, compared with Rs. 27.50/kWh during other periods.

The differentiation signals the regulator’s intention to attach greater value to renewable generation that can contribute to the grid when electricity is most needed, rather than treating all renewable energy output equally.

The same principle is evident in the prosumer tariff structure. New rooftop solar systems of up to 10 kW will receive Rs. 23.11/kWh, declining to Rs. 19.15 for systems above 10 kW and up to 40 kW, and Rs. 17.11 for systems above 40 kW and up to 250 kW.

For larger systems, the tariff rises sharply where BESS is incorporated. New rooftop solar-plus-BESS systems between above 250 kW and 1 MW will receive Rs. 45.53/kWh for the first 15 years during prioritised feed-in periods, compared with Rs. 15.81/kWh at other periods.

For systems above 1 MW, the corresponding prioritised tariff for new rooftop solar-plus-BESS is Rs. 42.49/kWh for the first 15 years.

Existing rooftop solar prosumers adding BESS will also receive enhanced prioritised-period remuneration, with the tariff calculated using the existing Standardised Power Purchase Agreement (SPPA) rate, subject to the formula specified by the PUCSL.

The regulator has simultaneously tightened the framework governing distributed generation. Distribution licensees must assess and publish their available network hosting capacity for rooftop solar and BESS installations each month, while the NSO is required to monitor monthly capacity additions under each feed-in tariff category and report them to the PUCSL.

Systems of 100 kW and above will also require a generation licence once the new Electricity (Applications for Licences and Exemptions) Regulations are enacted.

The tariff decision comes as Sri Lanka seeks to expand renewable generation while maintaining grid stability. The regulator has therefore retained provisions allowing the distribution licensee or NSO to temporarily limit or curtail exports from rooftop solar and BESS installations where required for system security, subject to written justification to the PUCSL.

BESS installations will operate under 15-year SPPAs, while the new tariff applies only to rooftop solar and BESS applicants obtaining valid grid clearance on or after 25 August 2026.

The PUCSL’s decision consequently goes beyond a routine tariff reset. By offering materially higher remuneration for battery-backed renewable generation while imposing cost limits and a hard capacity target, the regulator is attempting to align private investment incentives with the immediate operational needs of the electricity grid.

The test will now be whether the enhanced tariffs can translate into 450 MW of commissioned solar-plus-storage capacity within roughly seven months, without transferring excessive procurement costs to electricity consumers.

A half-century of recurring current-account weakness suggests that Sri Lanka’s external constraint is not merely a crisis-management problem. The country must protect and grow its traditional foreign-exchange earners while systematically opening new pathways that make a measurable net contribution to the national FX position.

Sri Lanka’s current account is back in the news. After recording surpluses in 2023, 2024 and 2025, the balance moved into a cumulative deficit of about $ 245 million in the first half of 2026. That does not undo the progress made since the 2022 crisis. But it revives a question that is much older than the latest monthly numbers.

Why does Sri Lanka’s external position so easily return to stress?

I ask this as a manufacturer who has spent four decades earning foreign exchange and paying for imported inputs, not as an economist. From that seat, the pattern is hard to miss.

For decades we have discussed debt, reserves, exchange rates, import controls, export promotion, tourism, foreign investment and IMF programs as separate subjects. Yet beneath many of them sits a recurring national constraint: the economy has repeatedly needed more foreign currency than its productive and service-earning base could comfortably generate.

That does not make the current account the sole root cause of Sri Lanka’s economic difficulties. A current-account balance is an accounting outcome, not a moral score. Deficits can be entirely sensible when they finance productive investment that builds future earning capacity. Nor should fiscal, monetary, governance and debt-management failures be reduced to one external-sector indicator.

But a pattern that persists for half a century deserves more than routine management.

Pattern too persistent to ignore

The Central Bank of Sri Lanka’s own historical series shows that Sri Lanka recorded a current-account deficit in 47 of the 51 years from 1975 to 2025. The only surplus years were 1977, 2023, 2024 and 2025.

The exceptional deficits of the early 1980s should not be read as evidence of one simple policy failure. The post-1977 liberalisation released pent-up import demand, a major public-investment program sharply raised imports, and the second global oil shock worsened Sri Lanka’s terms of trade. The current-account deficit reached 16.4% of GDP in 1980 and remained exceptionally high in 1981 and 1982.

That is precisely why no single year should carry the argument. The more important evidence is that, after those extraordinary circumstances passed, the economy kept returning to external deficits under different governments, exchange-rate regimes, development strategies and global conditions.

Instead of asking only, ‘How do we finance the external gap this year?’, we should also ask, ‘Why has the economy not generated a sufficiently broad and resilient portfolio of net foreign-currency earning pathways over several generations?’

Figure 1. Sri Lanka: current-account balance as a share of GDP, 1975 to 2025. Source: CBSL Annual Economic Review 2025, Special Statistical Appendix, External Sector Table 4.

Financing gap is not the same as fixing it

Sri Lanka was able to live with recurring external deficits because financing was available in different forms at different times. Concessional borrowing, bilateral and multilateral finance, foreign investment, other capital inflows, reserve drawdowns and, later, international sovereign bonds all helped bridge external financing needs.

These inflows were not inherently undesirable. Many financed valuable infrastructure, development and private investment. Trouble begins when it becomes easier to borrow foreign currency than to plan and earn it, and the country stops building its own earning power.

A country can finance an external imbalance for years without transforming the structure that produces it. As long as lenders are willing, reserves are adequate and external liquidity is available, the underlying constraint can remain manageable. When financing conditions tighten, confidence falls or reserves are depleted, the same weakness can become a crisis.

What 2022 exposed

Sri Lanka’s 2022 crisis had many causes. Major fiscal and monetary policy errors, tax reductions, the loss of tourism during the pandemic, global commodity shocks, exchange-rate policy, weak reserves and an unsustainable debt structure all played roles.

It would therefore be simplistic to describe 2022 merely as a current-account crisis. But the exhaustion of usable foreign exchange and the loss of access to external financing converted accumulated weaknesses into an immediate national emergency. Sri Lanka could no longer obtain enough foreign currency to meet essential imports and debt obligations through the mechanisms on which it had previously relied. Ordinary families felt it in the fuel queues, the gas shortages and the pharmacy shelves, long before they read it in a balance-of-payments table.

The lesson should not only be that Sri Lanka must never again lose control of reserves or debt. The deeper lesson is that the country must build a much larger, more diversified and more resilient capacity to generate foreign currency.

Recent surpluses are progress, not proof of transformation

The return to current-account surpluses after the crisis is a significant achievement. The CBSL estimates the 2025 surplus at about $ 1.7 billion, equivalent to 1.6% of GDP. Strong remittances and services inflows were important supports, even as the merchandise trade deficit widened.

The first half of 2026 nevertheless produced a cumulative current-account deficit of about $ 245 million. Remittances remained strong. But higher fuel import costs linked to the conflict in the Middle East, a full year of normal vehicle imports after restrictions were lifted, and weaker tourism and services earnings were together enough to turn the balance. It is worth pausing on that. One regional conflict and one year of ordinary vehicle imports were sufficient to reverse three years of surplus. That says less about 2026 than it does about how thin the earning base beneath those surpluses still is.

The point is not that Sri Lanka has returned to crisis. It is that the external account can still change direction quickly. A few surplus years are welcome evidence of improvement, but not sufficient evidence that the underlying FX-earning structure has been transformed.

Liabilities still have to be serviced

The claims on future foreign-currency earnings also remain substantial. CBSL data show total external debt-service payments of about $ 5.1 billion in 2025. IMF projections, on the assumptions embedded in the current program and debt restructuring, keep annual external debt service in the broad range of roughly $ 3.9 billion to $ 5.5 billion through 2032.

Debt restructuring has made the burden more manageable. It has not removed the need to earn the foreign currency with which those obligations must ultimately be serviced.

This is where the old method breaks down. For decades, when a repayment fell due, the answer was to borrow again. That is what the restructuring was needed to undo, and lenders will not allow it to be repeated on the same terms. The four to five billion dollars a year shown in the chart cannot be rolled over the way they once were. They have to be earned, year after year, on top of what the country needs for fuel, medicine, food and the imports its industries run on. Borrowing to repay borrowing is not a plan. It is the road that led to 2022.

That gives Sri Lanka a practical reason to think beyond recovery. The country needs not only enough FX to avoid another shortage, but an expanding margin of external earning capacity that can support growth, investment, imports and debt service at the same time.

Figure 2. External debt service remains a material claim on future foreign-currency earnings. 2025 actual; 2026 to 2032 IMF projections.

Are the traditional pathways enough?

Sri Lanka should continue to push its established FX pathways aggressively: merchandise exports, tourism, logistics, IT and business-process services, professional services, higher-value agriculture, maritime activity, foreign investment and remittances. These are national strengths, and there is considerable scope to improve their productivity and value addition.

The question is not whether these pathways matter. They unquestionably do. The question is whether relying predominantly on the same portfolio will be enough to create the scale, diversity and resilience of net FX earnings required for Sri Lanka’s next stage of development.

Five decades of recurring external imbalance suggest that this question deserves a serious answer.

Measure what actually stays with the country

We may also need an additional decision lens. Policy discussion often celebrates gross export earnings, gross tourism receipts or the headline dollar value of an investment. Those numbers matter, but they do not always tell us how much foreign currency an activity ultimately adds to Sri Lanka’s external position.

Alongside conventional balance-of-payments measures, policymakers could therefore examine Net Foreign Currency Contribution, or NFCC: how much foreign currency an activity actually adds to, or saves for, Sri Lanka after accounting for the foreign currency it consumes or causes to flow out.

A simple example makes the point. A garment export worth one million dollars may carry five hundred thousand dollars of imported fabric, trims and accessories inside it. A software export of the same value may carry almost none. Both appear as one million dollars in the export statistics. Their contribution to the country’s foreign-exchange position is very different.

NFCC is not proposed as a replacement for established statistics. It is a practical screening lens. Thinking in these terms would encourage Sri Lanka to prioritise opportunities that genuinely strengthen the national FX position rather than merely produce an impressive gross number.

National FX Pathway Accelerator

If the diagnosis is accepted, a further question follows: who is responsible for continuously discovering and activating new FX pathways?

Sri Lanka already has capable institutions with defined mandates, among them the Treasury, CBSL, EDB, BOI, SLTDA and the line ministries. The missing element may not be another institution with another broad mandate. It may be a mechanism that works across those mandates.

A National FX Pathway Accelerator could be designed for that purpose. It need not be another ministry, large bureaucracy or funding agency. Its role could be narrower and more practical: continuously identify potentially scalable FX-earning or FX-saving opportunities; assess their expected NFCC; identify the regulatory, infrastructure, market-access or coordination barriers holding them back; connect the relevant public and private actors; push viable pathways through defined decision gates; and measure the realised FX contribution after implementation.

The emphasis should be on pathways, not projects alone. Opportunities may come from existing industries changing business models, or from technology, the diaspora, new professional services, logistics, intellectual property, specialised manufacturing, regional value chains and areas nobody has yet counted as FX earners.

Importantly, the mechanism should be open to ideas from outside formal authority. Businesses, professionals, researchers, universities, diaspora networks, public servants and citizens may see opportunities that do not naturally originate within an institutional mandate. Valuable national ideas should be judged by evidence, integrity and potential contribution, not by the title of the person who first identifies them.

A country with decades of recurring external deficits needs a deliberate national capability for FX creation: protecting what already works, improving the net contribution of established sectors, and relentlessly searching for additional pathways. The historical record is not an argument for pessimism. It is an argument for changing the question. Instead of asking only how Sri Lanka can finance its next foreign-exchange requirement, we should increasingly ask how many new, sustainable and measurable sources of net foreign currency we can create

Properly designed, such an accelerator would not weaken existing institutions. It would help them work together on opportunities that otherwise fall between institutional boundaries.

From FX management to FX creation

Sri Lanka has become considerably better at discussing how foreign exchange should be managed. Reserve adequacy, debt sustainability, exchange-rate flexibility and fiscal discipline are now central to national economic debate, and rightly so. Even the compulsory conversion of export proceeds, still a live grievance among exporters, is at heart a rule about managing the dollars that already come in, not about bringing in more.

But management alone cannot be the destination.

A country with decades of recurring external deficits needs a deliberate national capability for FX creation: protecting what already works, improving the net contribution of established sectors, and relentlessly searching for additional pathways.

The historical record is not an argument for pessimism. It is an argument for changing the question. Instead of asking only how Sri Lanka can finance its next foreign-exchange requirement, we should increasingly ask how many new, sustainable and measurable sources of net foreign currency we can create.

For forty seven of the last 51 years, Sri Lanka managed its way through a shortage it never set out to cure. The next generation will judge us by one thing: whether we kept managing, or finally learned to earn.

(The author is Founder and Chairman of the KIK Group of Companies, an export-oriented engineering and switchgear manufacturer and a Presidential Export Award winner, and serves on the Executive Committee of the Free Trade Zone Manufacturers’ Association of Sri Lanka. The views expressed are his own)

The Government has established an independent appeal committee allowing businesses to challenge sanctions, debarment, and blacklisting decisions imposed in public procurement, introducing a formal independent review mechanism that was previously absent from the procurement system.

The Finance, Planning and Economic Development Ministry said the mechanism had been established under Section 10.2 of Chapter 10 of the Procurement Guidelines – 2024 for Goods, Works and Non-Consultancy Services, with the aim of strengthening fairness, transparency, and confidence in public procurement.

The new mechanism provides bidders, suppliers, contractors, and service providers with an independent avenue to appeal against sanctions, debarment, or blacklisting decisions imposed by Chief Accounting Officers (CAOs) of Procuring Entities.

The Ministry said that until the establishment of the committee, there had been no formal mechanism, as required under Section 10.2 of the Procurement Guidelines – 2024, to independently review such appeals.

The committee was established following Cabinet approval on 8 June on a proposal submitted by the Finance, Planning and Economic Development Minister.

A three-member committee has been appointed for a three-year term, comprising a retired judge as Chairman and two former Ministry Secretaries as members.

The Ministry did not identify the three members in its media release.

The committee considers appeals based on written submissions, supporting evidence, and other relevant information provided by the parties concerned. It may also seek additional information or clarification where necessary to establish the circumstances surrounding a decision under review.

However, the committee does not replace the authority of Procuring Entities. Its mandate is to independently assess appeals and submit recommendations to the Treasury Secretary, who exercises the relevant authority under the Procurement Guidelines 2024.

The Department of Public Finance serves as the committee’s Secretariat, facilitating the appeals process, providing administrative and procedural support, and coordinating communication with relevant institutions.

The Finance Ministry said the committee has already considered several appeals lodged by bidders against sanctions imposed by CAOs of relevant Procuring Entities and submitted its recommendations to the Treasury Secretary.

For businesses participating in Government tenders, the mechanism provides an avenue outside the Procuring Entity to seek a review of decisions affecting their ability to participate in public procurement. Businesses are also able to submit relevant evidence and explanations as part of the review process.

The Ministry said the mechanism was intended to improve transparency and accountability in procurement decisions and provide businesses with greater confidence in participating in Government procurement opportunities.

It said the establishment of the committee was aimed at strengthening the institutional framework for governance and integrity in public procurement while supporting fair participation and the protection of public resources.