Category: Daily Financial Times

President Anura Kumara Dissanayake yesterday launched the 50 MW wind power project developed by Hayleys Fentons Ltd., in Mannar, with the Government announcing that it has secured private sector agreements to develop renewable energy over the next few years far exceeding expectations.

The state-of-the-art wind power plant will comprise 10 wind turbines and is expected to generate 207 million kilowatt-hours (kWh) of electricity annually. A notable feature of the project is the supply of electricity at a tariff of $ 0.0465 per unit, equivalent to Rs. 14.37 per unit. The project is scheduled for completion in March 2027, the President’s Media Division said.

Hayleys PLC Chairman/CEO Mohan Pandithage, Managing Director Hasith Prematillake, Executive Director Sarath Ganegoda, and Hayleys Advantis Ltd., General Manager Ruwan Waidyaratne were present at the occasion.

Speaking on the occasion, Energy Minister Kumara Jayakody stated that the project, which commenced construction yesterday, is not only a renewable energy initiative that will contribute to powering the country, but also a project designed to provide essential facilities and benefits to the people of the region.

‘In 2025, our target for renewable energy capacity addition was 1,848 MW. However, we were able to exceed this target by adding a capacity of 2,695 MW. For 2026, the target has been set at 2,078 MW, and agreements have already been signed for a capacity of 3,089.5 MW,’ the Minister said.

‘Similarly, while the targets for 2027, 2028, and 2029 were set at 2,563 MW, 3,253 MW, and 3,943 MW, respectively, agreements have already been signed for capacities of 3,822.5 MW, 4,332.5 MW, and 4,634.5 MW. Accordingly, for the period from 2025 to 2029, instead of the originally planned total capacity of 9,759 MW, agreements have now been secured for a total capacity of 12,789.5 MW. This clearly demonstrates that we are making significant and successful progress in achieving our renewable energy objectives,’ he said.

The Sri Lanka Insurance Institute (SLII) recently hosted a thought-provoking program at its Auditorium, drawing a large gathering of industry professionals on ‘Aftermath of Ditwah: Impact on the Insurance Industry’. The session provided timely insights into post-Ditwah challenges, regulatory considerations, claims management, and the evolving risk landscape.

The program was moderated by Senaratne Insurance Brokers Ltd. Chairman/Managing Director Ainsley Alles. The distinguished panel featured leading voices in the insurance sector, namely: Insurance Regulatory Commission of Sri Lanka (IRCSL) Director General Damayanthi Fernando, Ceylinco Holdings PLC Executive Director Dr. Jagath Alwis, Orient Insurance Ltd CEO/Managing Director Tanuj Edward, and HNB General Insurance Ltd. Director/CEO Sithumina Jayasundara.

In his opening remarks, Alles noted that the cyclone had devastated many livelihoods and businesses. He pointed out that most homes and SMEs had not been insured, leaving them dependent on the State for reconstruction and renovations. As of 5th January 2026, insurers had received claims exceeding Rs. 52 billion from more than 24,200 clients.

IRCSL Director General Fernando elaborated on the steps taken by the regulator in the aftermath of Ditwah, while highlighting the high-level discussions held with insurers, loss adjusters, and brokers to ensure the speedy settlement of claims. She also underscored the gaps in insurance penetration across the country and emphasized the need for regulatory reforms to address them. She further underlined that insurers and brokers must reach wider segments of the population with simplified, accessible policies, enabling more people to obtain coverage and thereby improving insurance penetration across the country.

Dr. Alwis highlighted the lessons Ditwah revealed about the adequacy of catastrophe risk modelling in Sri Lanka. He called for the reintroduction of a National Catastrophic Insurance Programme, enabling the public to access essential coverage against future disasters.

Edward examined the implications of Ditwah on reinsurance arrangements, noting that existing programmes helped keep insurers’ net losses at manageable levels. However, he cautioned that the cost of reinsurance is likely to rise at the next renewal cycle once the current losses have been settled by insurers and reinsurers.

Jayasundara focused on innovations in product design, particularly micro insurance and parametric insurance covers, which could provide affordable protection for vulnerable communities and also strengthen underwriting portfolios against future calamities.

SLII’s initiative underscored the importance of collective industry dialogue in building resilience and safeguarding communities against future disasters.

AIA Insurance has been recognised as the No. 1 Life Insurer in Customer Excellence in the prestigious LMD Customer Service Excellence Survey 2025, reaffirming its commitment to delivering exceptional service and helping Sri Lankans live ‘Healthier, Longer, Better Lives’.

The LMD Customer Service Excellence Survey is widely regarded as a benchmark for evaluating customer satisfaction across Sri Lanka. Conducted online, this year’s survey attracted over 3,200 responses, with participants voting for their preferred establishments in 40 categories of service organisations. The survey aims to identify the most trusted service providers and gain insights into evolving customer expectations. The methodology behind the survey ensures credibility and transparency.

Securing the top position among life insurers is a powerful testament of AIA’s commitment to customer-first principles that reflect AIA’s deep understanding of evolving customer expectations and its ability to deliver innovative solutions that truly resonate. Every interaction is designed to be seamless and meaningful, ensuring customers experience convenience and care at every stage of their journey. This achievement reinforces AIA’s philosophy that customer service is not merely a support function, but a strategic element of the business model. By embedding service excellence into its DNA and leveraging insights to anticipate future needs, AIA continues to set industry benchmarks and redefine what it means to lead with customer-centricity.

AIA Sri Lanka Director/CEO Chathuri Munaweera said: ‘Being ranked No.1 for customer excellence reflects our commitment to delivering exceptional service and building lasting relationships with our customers. We believe that every interaction matters, and we continuously strive to create meaningful experiences that go beyond insurance.’

The survey serves as a reminder of the growing importance of customer experience in today’s competitive landscape. AIA continues to integrate customer feedback into its service enhancements and to anticipate future needs, ensuring that every interaction adds value to the customer journey in its mission to empower individuals and families to live ‘Healthier, Longer, Better Lives’.

Vidullanka PLC said that it, together with consortium partner David Pieris Group, has received the formal Letter of Award from the Ceylon Electricity Board (CEB) for the development of Lot 2 of the Mullikulam Wind Power Project.

The company said the Letter of Award was issued on 14 January 2026, following an earlier disclosure dated 28 October 2025.

The project entails the construction and operation of a wind power plant with a total installed capacity of 50 MW for a period of 20 years on a Build, Own and Operate basis.

For the purpose of implementing the project, the consortium partners have incorporated a project company named Mullikulam Wind Power Ltd. The company said the shareholding of the project company is held equally, with a 50:50 split between the consortium members.

Vidullanka voting shares closed Wednesday unchanged at Rs. 23 while non-voting shares closed 10 cents on the up at Rs. 19.50.

Vidullanka PLC said that it, together with consortium partner David Pieris Group, has received the formal Letter of Award from the Ceylon Electricity Board (CEB) for the development of Lot 2 of the Mullikulam Wind Power Project.

The company said the Letter of Award was issued on 14 January 2026, following an earlier disclosure dated 28 October 2025.

The project entails the construction and operation of a wind power plant with a total installed capacity of 50 MW for a period of 20 years on a Build, Own and Operate basis.

For the purpose of implementing the project, the consortium partners have incorporated a project company named Mullikulam Wind Power Ltd. The company said the shareholding of the project company is held equally, with a 50:50 split between the consortium members.

Vidullanka voting shares closed Wednesday unchanged at Rs. 23 while non-voting shares closed 10 cents on the up at Rs. 19.50.

The State Pharmaceuticals Corporation of Sri Lanka (SPC) has registered an impressive improvement in its financial performance in 2025, marking one of its strongest years in recent history, according to its annual progress summary.

The SPC’s contribution to the Government through income tax and Treasury levies rose by 173% year-on-year (YoY) to Rs. 1.1 billion, compared with 2024. The Corporation also reported a 26% increase in revenue from its Own Revenue Stream (ORS) and a 9% rise in income from its State Osusala pharmacy network.

In a significant milestone, the SPC achieved full utilisation of its annual Budget allocation for supplies to the Department of Health Services (DHS) in 2025 through the issuance of indent orders, the first time this has been accomplished in the Corporation’s 53-year history. ORS production increased by 36% YoY, reflecting improved operational efficiency.

Revenue growth at State Osusala pharmacies was supported by the opening of five new outlets in Kiribathgoda, Narahenpita, Kegalle, Kalmunai, and Batticaloa, as well as efficiency improvements that enabled several previously loss-making outlets to return to profitability.

To further strengthen drug quality and safety standards, the SPC has initiated the ISO 17025 laboratory accreditation process. The Corporation has also expanded its corporate social responsibility (CSR) initiatives, including health camps and public awareness programs aimed at promoting rational medicine use and improved health practices.

As a major importer and supplier of pharmaceuticals, surgical consumables, laboratory chemicals, and equipment, the SPC continues to play a central role in supporting institutions under the Health Ministry. It also oversees the nationwide State Osusala network, ensuring public access to essential medicines at affordable prices.

All medicines distributed through the Osusala network undergo a rigorous four-stage quality testing process at the SPC’s laboratories before being released to the market, ensuring high standards of safety and efficacy.

Health Minister Dr. Nalinda Jayatissa, who conducted several inspections of SPC operations in 2025, acknowledged the Corporation’s achievements, while noting challenges faced by staff in a global pharmaceutical industry increasingly vulnerable to high-profit pressures and malpractice.

He reaffirmed the Government’s commitment to supporting SPC employees and safeguarding integrity in the sector.

SPC Chairman Dr. Manuj C. Weerasinghe, General Manager M.L. Subasinghe Arachchi, and the Board of Directors said the Corporation would continue to strengthen its operational network and pursue further progress in 2026.

Activists and media freedom organisations have objected to the promotion of a military intelligence officer named in the enforced disappearance case of journalist Prageeth Ekneligoda.

In a letter addressed to President Anura Kumara Dissanayake, Prageeth Ekneligoda’s wife Sandya Ekneligoda said she learned through media reports that Lt. Col. Erantha Radeesh Peiris had been promoted to the rank of Brigadier. She said she strongly opposed the decision, noting that Peiris is a defendant in the ongoing criminal case relating to her husband’s disappearance in 2010.

Peiris is among several military intelligence officers charged in connection with the case. According to the letter, the Attorney General filed 17 indictments against him in 2019, including a charge of murder. Criminal Investigation Department investigations have identified him as being directly involved in the abduction, she said. Sandya Ekneligoda warned that conferring a senior rank on an officer facing serious criminal allegations could undermine the judicial process. She said the promotion risks influencing witnesses, discouraging investigating officers, and weakening confidence in the administration of justice.

She also referred to a separate ongoing case in which a retired senior officer, who is also an accused in the Ekneligoda case, is alleged to have threatened a key witness.

Civil society organisations and press freedom groups said the promotion damages public confidence in accountability for enforced disappearances and undermines trust in the rule of law.

Sri Lanka’s post-International Monetary Fund (IMF) period, when external debt servicing, including International Sovereign Bond (ISB) repayments, begins to rise, is unlikely to pose a major macroeconomic risk in 2026 if current fiscal and external surpluses are maintained, according to Lynear Wealth Managing Director Naveen Gunawardane.

Speaking at the HNB Investment Bank (HNBIB) Investor Forum titled ‘Recovery to Resilience’ this week, Gunawardane said Sri Lanka is entering the later stages of the IMF program with a macroeconomic structure that is materially stronger than in past cycles, reducing vulnerability as debt repayments increase.

‘When we come to 2028, Sri Lanka will be out of the IMF program and our external debt servicing picks up a little bit,’ he said. ‘However, as long as we can allow these surpluses to continue, I am not too worried about 2028.’

In November 2025, Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe said the country’s annual external debt servicing would average $ 2.75 billion up to 2027, and then average $ 3.5-$ 4 billion over the next decade.

At this week’s HNBIB Investor Forum, Gunawardane said the foundation for his outlook was the sustained combination of a primary surplus and a current account surplus, a position Sri Lanka has rarely maintained historically.

‘If I look at the macro position, Sri Lanka’s macro is probably the strongest that I have personally seen over the last 10 to 20 years,’ he said. ‘For most of our history, we were a two-digit deficit country. We had a deficit on the current account side and a deficit on the primary balance side. Over the last three years, we have been running primary surpluses and we have also been running a current account surplus.’

He explained that a primary surplus indicates that Government revenues are sufficient to meet non-interest expenditure, fundamentally changing the nature of public borrowing.

‘So when you say the Government is running a primary surplus, what it basically means is that the Government is generating sufficient revenue to cover its expenditure excluding interest. Borrowing is then largely for rolling over existing debt and meeting interest payments, not for day-to-day spending.’

Gunawardane said this fiscal position has already proved its value during recent shocks, allowing the Treasury to respond using cash buffers rather than additional borrowing. ‘When the shock hit, we went into it with surpluses on the primary side. The Treasury had about Rs. 1.1 trillion in the bank account. That is very different to what happened when we went into COVID.’

On the external front, he noted that the current account surplus recorded in 2025 was structurally stronger than in previous years, as it was achieved without import controls and despite a rebound in vehicle imports.

‘In 2025, we had a surplus with all import restrictions removed, including about $ 1.3 billion of vehicle imports. What really helped us was workers’ remittances,’ he said, estimating inflows at around $ 7.8-7.9 billion for the year.

Looking ahead, Gunawardane said remittances may normalise in 2026, but easing vehicle imports and continued inflows should help sustain a current account surplus and support currency stability.

‘When I look at 2026 and 2027, I see a macro picture where we continue to have a primary surplus and a current account surplus. That tells me interest rates should be relatively stable and the currency should also be relatively stable,’ he said. ‘I think we are likely to avoid a 3% depreciation in 2026.’

He added that this backdrop reduces the risk of sharp interest rate increases or currency pressure during the post-IMF transition, provided fiscal discipline is maintained as external debt servicing obligations resume.

The Government will introduce a digital card system for fuelling vehicles belonging to State institutions, aiming to enhance transparency and efficiency in fuel procurement.

This decision was made by the Cabinet of Ministers on Monday. ‘As a first step, the system will be implemented for pool vehicles of the Presidential Secretariat as a pilot project. Based on its success, the same digital fuelling system will be extended to other State institutions countrywide,’ Cabinet Spokesperson and Minister Dr. Nalinda Jayatissa said at the weekly post-Cabinet meeting media briefing on Tuesday.

He said the requirement of using a digital card system for supplying fuel for vehicles belonging to Government institutions has been identified. ‘As per the new system, payments will be reimbursed through online banking based on actual fuel requirements, reducing personal intervention in the process,’ he added.

The initiative has been jointly developed by the Bank of Ceylon and the Ceylon Petroleum Corporation (CPC).

When asked how many vehicles are in the pool and the cost expectation, Dr. Jayatissa said he will provide those details next week.

With five weekends of cricket left, SSC at the moment seem on course to lift the Tier B 3-Day

League title being the only unbeaten team in the tournament so far and looking quite a formidable outfit with several national cricketers in their ranks.

With all 12 competing teams having completed six matches each, SSC hold onto a 23-point lead over their nearest rivals Negombo CC who elevated themselves to second place with a 118-run win against Leo CC last weekend.

With their home venue undergoing construction in preparation for the ICC Men’s T20 World Cup next month, SSC find themselves having to play their matches away. They travel to last weekend’s venue the SLLDC (Sri Lanka Land Development Corporation) grounds in Kirimandala Mawatha where they will meet Army SC of the six matches commencing today. Colombo Malays CC denied SSC full points at this venue by holding onto a draw after being forced to follow-on. Having lost to Galle CC outright last weekend, Army SC will have a tough time trying to deny SSC from taking full points from them.

Sri Lanka’s primary Test spinner Prabath Jayasuriya has been the architect off SSC’s successful campaign in the tournament with a bag of 51 wickets (avg. 12.78) from 6 matches that includes 5 five-wicket inning hauls. No other SSC bowler comes near his figures, the next best being seamer Pramod Madushan’s 12 wickets from 6 matches. In the batting it has been Nipun Dananjaya with 2 centuries and 2 fifties and an aggregate of 457 (avg. 65.29) who has made the most runs for the club.

Negombo CC have a key game when they take on third placed Moratuwa SC at De Soysa Stadium, Moratuwa. Umesh Lakshan (453 runs) and off-spinner Amith Perera (34 wickets) have been instrumental in their progress, while for Moratuwa SC their spin duo of Chanaka Ruwansiri (29 wickets) and Gayan Sirisoma (25) have excelled with the ball, and Rashmika Mevan (354 runs) and Gavin Boteju (335) have been amongst the runs.

The Sebastianites v United Southern SC match at Army grounds, Saliyapura could turn out to be a keenly contested affair with each team having four wins out of six games. Sebastianites’ success will depend largely on the start that their prolific opener Rusiru Vilochana can give. The former Nalanda College cricketer is the leading run-getter in the tournament with 653 runs (avg. 59.36) inclusive of 3 centuries one of which is a double hundred. It will be a battle of personalities between Vilochana and Adeesha Nanayakkara who is United Southern SC’s main run-getter with 522 runs and 2 centuries. Sebastianites should also be wary of the United Southern SC spin cum seam combination of Dhanosh de Silva and Tharush Damindu who combined have taken 50 wickets.

Following back-to-back wins Leo CC suffered a setback when they went down to Negombo CC. They get a chance to redeem themselves taking on Galle CC at Welisara. Colombo Malay CC should gain a lot of confidence for their game against Kandy Customs SC at the BRC grounds, after the stubborn resistance they put up against SSC.

In the battle of the wooden spoonists Ragama CC meet Navy SC at the Army grounds in Salawa. Both teams will be fighting hard to avoid finishing at the bottom of the standings as this will mean relegation to playing in the Governors’ Cup next season.

In the past weeks, newspaper headlines have brought to the forefront a growing narrative that banks are prospering while SMEs are struggling. This outcome has largely been attributed to banks overlooking the impact of external shocks on SMEs and to the current lending frameworks that govern credit markets. Such headlines call for independent statutory mechanisms to probe the fairness of cases leading to credit enforcement. Whilst such concerns are understandable on moral and ethical grounds, urging for artificial interventions in credit markets risks promoting policies that undermine the very mechanisms that enable growth, particularly at a time when economic recovery is urgently needed.

Credit is an avenue available for SMEs to fund their current economic activity based on expected future outcomes. It can be used for investment, as working capital, and to smooth out cash flow volatility. Increased access to credit plays a critical role in stimulating aggregate demand and supporting businesses, especially during periods of recovery.

Many of these sources argue that SMEs were viable before being subject to repeated external shocks in the Sri Lankan economy, such as the Easter Sunday attacks, shutdowns as a result of the Covid-19 pandemic, the economic crisis, which led to the collapse of the currency, and extreme interest rate volatility, as well as repeated climate related disruptions (for instance Cyclone Ditwah). Thus, their inability to service loans has not been attributed to poor entrepreneurship but the repeated exposure to such events beyond their control. While this claim carries weight, calling for the intervention in market mechanisms that govern financial and credit markets could potentially have an effect of worsening the very problems such interventions aim to resolve.

This is because credit inherently involves an element of risk. Repayment is uncertain, and therefore default is always a possibility. Risk varies by borrower, sector, and timing. Credit exists precisely because uncertainty exists. As a result, lending decisions are based on expected cash flows, collateral, sector risk, and macroeconomic conditions. Moreover, exogenous shocks to the economy are systematically taken into consideration. Interest rates and parate execution laws, and asset recovery mechanisms exist to balance risk and return. The higher the risk, the higher the price of the loan. This is necessary because if loans fail, it is ultimately the depositors and by extension the financial system that is compromised. Painting banks as villainous actors can have the opposite of the intended effect. Laws are in place to regulate the conduct of financial institutions for the benefit of all.

Sri Lanka is currently emerging from one of its major economic crises, and therefore, in such a precarious environment, banks cannot simply ignore risk without threatening their own survival and, by extension, the stability of the nation’s financial system. As the Governor of the Central Bank, Dr Nandalal Weerasinghe stated, ‘The banking system is the custodian of this money. If something happens to the system, the savings of the entire country could be lost». He made these comments at a seminar held on 20 December at Kandy City Centre, which was aimed at educating the SMEs in the Central Province on the assistance available from state and private banks to rebuild businesses damaged by national disasters.

Financial Repression Theory, developed by McKinnon (1973) and Shaw (1973), argues that government intervention in financial markets hampers economic growth in developing countries. Government policies such as interest rate ceilings, interference with market pricing of risk and directed credit, distort credit allocation. In this instance, interventions that are supported by such newspaper narratives risk reducing the pool of loanable funds in the market, thus reducing the amount of credit that is available for productive investment. This could also expand the informal sector in a country’s economy and increase illegal lending practices. Other potential drawbacks include an increase in financial exclusion, resulting in credible borrowers and first-time borrowers being unable to secure loan approvals, thus reducing both the quantity and quality of investment, ultimately stifling economic growth.

As the fourth pillar in a democratic society, a country’s media should definitely hold institutions accountable for malpractice. However, it should be noted that credit markets do not function on morality alone and that they function based on economic incentives. Framing one side as a villain in one’s narrative maybe rhetorically effective but when interventions in capital markets are encouraged, this opens the door to further distortions and in the long run, it is often the most vulnerable who bears the costs of these changes. Moreover, banks and financial institutions that are absorbing the risks of such ventures should not be discouraged, especially in the current context of an economy such as Sri Lanka that urgently needs investment-led economic growth. Therefore, we must ensure that public discourse supports and not undermines the delicate balance that credit markets depend upon.