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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.

The 2024 Electricity Act No. 36: A market-oriented blueprint

The 2024 Electricity Act represented a significant initiative to restructure the CEB and liberalise the electricity market to enable delivery of cost-effective and reliable electricity in a sustainable manner. The Act sought to facilitate increased private sector participation and investment in the sector, addressing longstanding inefficiencies and underinvestment within these areas. The Act proposed:

1. Unbundled CEB into Independent Corporate Entities by splitting the CEB into distinct entities to improve competition, efficiency and transparency:

Generation: Divided by technology-coal, large hydro, oil/gas, and renewables.

Transmission: Centralised under a single, state-owned National System Operator.

Distribution: Handled by four independent companies plus LECO.

Support functions: Specialised entities for procurement, trading, and retail supply.

2. Established a Wholesale Electricity Market in a phased rollout, allowing generators and distributors to transact through transparent bidding and contracts, with the Public Utilities Commission of Sri Lanka as regulator.

3. Created a National Electricity Advisory Council as a statutory body with institutional independence, intended to provide broad-based, expert advice on electricity policy and regulation.

4. Encouraged open access and private sector participation

Permitted open access to the transmission network, enabling private generators to sell directly to distributors.

Encouraged public-private partnerships and allowed listing of successor companies on the stock exchange.

Private investment was explicitly welcomed in generation, distribution and transmission. Large hydropower assets remained state-owned.

5. Established a National System Operator (NSO) responsible for real-time dispatch, grid management, scheduling and balancing, and overseeing bulk transactions between generators and distributors.

6. Provided a transition plan and employee protections

CEB’s assets and liabilities were to be transferred to successor companies via a process managed by the Power Sector Reform Secretariat.

Employees were given options to transition to new entities with preserved benefits; or opt for voluntary retirement.

A dedicated fund was established to manage pensions and provident funds.

Sri Lanka Electricity (Amendment) Act, No. 14 of 2025: Ideology over investment?

The NPP Government’s amendments reflect a different vision-one rooted in centralised control, public ownership, and cautious reform. The Sri Lanka Electricity (Amendment) Act, No. 14 of 2025 introduced several consequential changes that significantly altered the reform trajectory set by the Electricity Act No. 36 of 2024. Here are the most impactful changes:

1.Structural reversal and governance centralisation

National Electricity Advisory Council replaced by a Minister-appointed committee, reducing institutional independence.

Boards of successor companies are appointed by the Minister, with Treasury and Ministry representation-reintroducing political influence into operational governance.

2.Ownership and licensing restrictions

Generation and distribution licenses are restricted to state-owned entities only. It blocks private sector entry into grid operations.

Cross-ownership limits imposed: Private companies cannot hold more than 5% in generation and distribution companies simultaneously, discouraging integrated private investment. If LECO or LTL eventually gets listed, divesting these assets will become challenging as companies with financial and technical capacities may be precluded from bidding.

Curiously LTL with 894+ MW of thermal and renewables generators, is now within the transmission company, creating a potential conflict of interest.

3.Fragmentation instead of functional unbundling

Aggregates generation and distribution (including LECO), into successor companies under Treasury ownership-with only a vague promise of future disaggregation.

Recreates the vertically integrated CEB in fragmented form, preserving inefficiencies and union dominance, and increasing costs, rather than achieving the functional separation and competition that true unbundling was meant to deliver.

More concerning is that safeguards against future rebundling have been removed, undermining efforts to attract private investment.

4.Shift in dispatch philosophy

The 2024 Act emphasised least-cost economic dispatch. The 2025 amendment replaces this with security-constrained economic dispatch, prioritising reliability and system stability over cost optimisation. While this aligns with global practices for grid resilience, it may increase costs unless paired with efficiency reforms.

This approach implies a preference for ‘dispatchable’ generation, which is CEB identifies mainly as thermal generation. Intermittent sources such as solar and wind are given lower priority, even though they can be made dispatchable at lower cost, as demonstrated in other countries.

5.Policy realignment

Although the NPP Government aims to green Sri Lanka’s power sector, there is also support for including natural gas as a clean energy source to help meet greenhouse gas reduction targets. While it is cleaner than coal, few countries consider natural gas as ‘clean energy’.

However, the structural and market changes may hinder private investment in renewables, especially if procurement remains opaque or politically influenced.

Entrenched benefits: Ring-fencing inefficiency

Perhaps most tellingly, the 2025 Act seems to ring-fence the generous salaries, allowances, and overstaffing that have long characterised the pre-reform CEB. These protections-while politically aligned with the NPP Government-undermine the very efficiencies that greater private sector participation could have delivered under the 2024 framework. The NPP Government has signalled its intention to sign a collective agreement that will also bind the successor companies to guaranteeing several existing benefits and processes.

It is perfectly understandable that CEB employees would do their utmost to preserve the benefits they have enjoyed. Any workforce would. But it is the role of Government to act in the interest of all Sri Lankans-not just one segment. Protecting entrenched privileges at the expense of national progress is a short-sighted bargain.

Table 1 shows CEB’s productivity is similar to some Indian utilities but lags East Asian ones, while its salary costs are higher than those of its peers.

Financing in a post-reform landscape

Here lies the paradox. The 2025 Act reinforces state control-but under the IMF agreement, the government ability is constrained to offer sovereign guarantees or expand public borrowing to fund CEB investments. The very tools that once sustained the CEB-Treasury bailouts, state-backed loans-are now effectively off the table.

The 2024 Act was designed precisely to address this constraint. By permitting private ownership in generation and distribution and in transmission, it aimed to attract capital without burdening the state. It offered a pathway for independent power producers, renewable developers, and distribution operators to invest, innovate, and expand the grid.

The CEB anticipates needing $5 billion in new capital investment up to 2044, compared to $1.2 billion in capital investment made in the preceding ten years. But, the 2025 amendments have made investment less attractive by limiting cross-ownership, tightening licensing, and increasing political oversight. With no sovereign guarantees or strong private involvement, the CEB now faces a shortage of capital.

What’s left on the table?

Ultimately, to effectively mobilise the required investment, the NPP Government will need to balance the constraints of the new legislative framework with innovative financing mechanisms, regulatory clarity, and a willingness to partner with both international and domestic stakeholders. There may be yet a few financing options:

Multilateral finance: Institutions like the World Bank, AIIB and ADB may offer concessional loans, sector or policy loans, or green bonds, but these funds are limited and come with policy conditions and limited flexibility.

Bilateral finance: Countries with strategic energy interests-India, China, Japan, EU-may offer targeted financing, but often with geopolitical strings attached.

Ring-fenced project finance: Special Purpose Vehicles for renewables could attract private capital but require regulatory clarity and credible governance. The experience with the Adani Wind Farm Project is not encouraging.

Tariff reform: Raising prices to reflect true costs in line with the IMF EFF has generated internal cash flow, and profits, but remains politically sensitive.

Asset recycling: Monetising non-core assets could offer short-term relief, but not long-term sustainability.

Business leader Dhammika Perera yesterday part sold his stake in Commercial Bank for Rs. 5.5 billion.

The market saw 26.55 million voting shares of Commercial Bank done at Rs. 195 per share via 39 crossings. Overall, Commercial Bank saw 29 million shares traded for Rs. 5.68 billion, accounting for 43% of a whopping

Rs. 13.3 billion turnover.

Commercial Bank voting share closed the day at Rs. 203.25, up by 3% or Rs. 6.25.

The stake in Commercial Bank is not strategic but is part of Dhammika’s trading portfolio.

As at end June, Dhammika held 39,226,489 million voting shares amounting to 2.5% stake and was the 11th largest shareholder. End of last year Dhammika was the 8th largest shareholder with 3.66% stake amounting to 55.2 million voting shares.

Dhammika’s strategic banking sector interests are Sampath Bank and Pan Asia Bank.

Foreign Affairs Minister Vijitha Herath told Parliament yesterday a Bill to establish a Truth and Reconciliation Commission will be presented soon, while preparations were underway to hold Provincial Council elections next year.

He said discussions will be held to determine the electoral framework, noting that a decision would be made on whether to conduct the polls under the proportional representation system or a mixed model.

The Minister also said new legislation to replace the Prevention of Terrorism Act (PTA) is being finalised.

‘Sri Lanka’s human rights issue had already been internationalised and made more complex by the time this Government took office in 2024,’ Herath noted.

The grand finale of Venture Engine 2025 took place recently at Cinnamon Life – The Studio, spotlighting Sri Lanka’s most promising entrepreneurs and marking another milestone for the country’s growing startup ecosystem.

From over 175 applicants, twelve exceptional startups reached the finals after months of mentoring and pitching. Their ideas showcased the diversity and depth of Sri Lanka’s innovation landscape, from health technology to sustainable development and agri-tech.

DiabSense emerged as the winner of Venture Engine 2025, recognised for its groundbreaking use of AI-powered thermal and visual imaging to help clinicians detect diabetic foot complications non-invasively. Founded by Kosala Jayasundara, the startup was honored for addressing a critical healthcare challenge with scalable innovation. The award was presented by Industry and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe and BOV Capital Co-Founder and Peak XV Partners Managing Director Rajan Anandan.

AGC Innovate, founded by Umayanga Nanayakkara, was named First Runner-Up for developing sustainable solutions that translate research into practical, large-scale impact across construction and environmental management. The award was presented by Dialog Axiata PLC Group CEO Supun Weerasinghe, and BOV Capital Managing Partner Prajeeth Balasubramaniam.

Spectrify AI, co-founded by Jeevan Gnanam and Lakshan De Silva, secured second runner-up, recognised for its use of AI and spectral analysis to improve quality control and consistency in agriculture. Adil Mansoor and Capital Alliance Partners CEO Nishok Goonasekara presented the award.

Two special awards further highlighted entrepreneurial diversity. CSPEAKH, founded by Nadini Perera, received the Best Female-Led Business Award, presented by Shea Wickramasingha, Najila Ablej, and Prajeeth Balasubramaniam. The Most Impactful Business Award went to Seashore Garden, founded by Shawn Senarath, Sabina Dissanayake, Dasun D. Silva, Malika Sugathapala, and Duvindu Ranasinghe, and was presented by Sanchayan Chakraborty and Jan Metzger.

The event also featured an Alumni Pitch Session led by WSO2 Founder and CEO Dr. Sanjiva Weerawarana and Prajeeth Balasubramaniam, where previous Venture Engine participants presented their next-stage ventures.

Colombo Land and Development Company PLC has appointed Ruchira Withana to its Board as a Non-Executive Director.

Withana, Director General (Covering) of the Urban Development Authority (UDA), brings over five years of experience in the private sector and 27 years in the public sector as a SLAS Officer in the fields of business management, administration, industrial development, training, research, and land management and development, with significant experience in foreign-funded projects and programs supported by JICA, UNIDO, IRG (USA), ADB, and the UN.

He holds a Postgraduate Diploma in Environmental Management from the Maastricht School of Management, Netherlands, and a B.Sc. in Physical Science from the University of Kelaniya. In addition, he is pursuing a Master’s Degree in Archaeology from the University of Kelaniya.

He has held key positions including Regional Director at Vocational and Technical Training Ministry, Director at Industry and Commerce Ministry, Director at Buddhasasana, Religious and Cultural Affairs Ministry, Secretary (Fund) at Buddhasasana, Religious and Cultural Affairs Ministry, and Additional District Secretary (Land) at the District Secretariat, Gampaha.

Currently, he serves as Director General of the National Physical Planning Department in addition to his role as Director General (Covering) of the Urban Development Authority. He is also a Board Member of the Geological Survey and Mines Bureau, Lanka Mineral Sands Ltd., Gem and Jewellery Authority, Sri Lanka Land Development Corporation, Waters Edge Ltd., Urban Investment and Development Company Ltd., Condominium Management Authority, Road Development Authority, and Lanka Electricity Company Ltd.

Police said yesterday that a man and a woman arrested at a house in Pahala Biyanwila, Kadawatha, on Wednesday were found with more than 18 kilograms of narcotics in their possession.

Initial reports indicated the suspects had 12 kilograms of drugs at the time of arrest, but the quantity was later revised following a detailed inventory.

According to Police, the haul included 12 kilograms of heroin, 2.4 kilograms of Kush cannabis, 2.3 kilograms of hashish, and 1.4 kilograms of crystal methamphetamine (Ice).

The suspects, a 32-year-old woman and a 26-year-old man, are being held by the Kadawatha Police and were produced before the Mahara Magistrate’s Court yesterday.

The US Department of the Treasury yesterday said it has imposed sanctions on a global network of companies, ships, and individuals facilitating Iranian petroleum and liquefied petroleum gas (LPG) exports, including shipments that reached Sri Lanka.

This is part of a broader crackdown on what Washington describes as Iran’s ‘shadow fleet.’

In a statement issued from Washington, the Treasury’s Office of Foreign Assets Control (OFAC) said it has sanctioned over 50 entities, individuals, and vessels connected to Iran’s energy export operations, targeting billions of dollars in trade that has generated critical revenue for Tehran’s regime.

According to the Treasury, two United Arab Emirates (UAE)-based firms, Markan White Trading Crude Oil Abroad Co. LLC and SLOGAL Energy DMCC, played key roles in enabling sales and shipments of Iranian LPG to Sri Lanka.

In late 2024 and early 2025, SLOGAL reportedly purchased Iranian LPG that was delivered by Panama-flagged and Palau-flagged vessels GAS DIOR and MAX STAR to Sri Lanka. These vessels, along with their operating companies, Aerilyn Shipping Inc. (Panama) and Ocean Inc. (Marshall Islands), have now been sanctioned.

The Treasury said multiple consignments of Iranian LPG were sent to end users in Sri Lanka and Bangladesh during this period. The shipments were coordinated by Iran-based Persian Gulf Petrochemical Industry Commercial Co. (PGPICC), one of Iran’s largest petrochemical brokers, through intermediaries in the UAE and Hong Kong.

The OFAC identified a wider web of entities across the UAE, Hong Kong, China, and the Marshall Islands for operating in the Iranian petroleum sector or assisting sanctioned firms.

‘All property and interests in property of the designated persons that are in the United States or in the possession or control of US persons are blocked,’ the OFAC said. The measures effectively bar US citizens and companies from conducting transactions with the listed entities and vessels.

The Treasury warned that any institutions or individuals engaging with sanctioned actors risk secondary sanctions, potentially exposing foreign banks or trading firms to US enforcement actions.

‘The Treasury Department is degrading Iran’s cash flow by dismantling key elements of Iran’s energy export machine,’ Treasury Secretary Scott Bessent said, adding that the sanctions are intended to curb Tehran’s ability to finance militant groups across the Middle East.

The latest measures represent the fourth round of sanctions targeting China-based refineries and intermediaries since mid-2024, marking an escalation of US efforts to curtail Iran’s petroleum revenue streams.

Sri Lanka, which imports most of its LPG requirements, has in recent years sourced cargoes through regional traders based in the Gulf and Asia.

Sri Lanka’s exposure to Iran is limited: According to the Export Development Board (EDB), total imports from Iran amounted to $ 2.48 million, which had fallen gradually from $ 9 million in 2021.

European Data Protection Board (EDPB) Transparency and Legal Officer Roberta Muraro yesterday clarified that governments may legitimately restrict the disclosure of certain information in the public interest, particularly in matters concerning international relations and ongoing negotiations under EU data protection standards.

In response to a query on Sri Lanka’s recent Memorandum of Understanding (MoU) on Defence Cooperation with India, Muraro explained that, according to EU principles, withholding information can be justified, where disclosure could jeopardise diplomatic negotiations or sensitive international engagements.

‘In such cases, the Government has the right to protect data and not make it public in the interest of safeguarding international relations,’ she told a group of journalists from Sri Lanka who are on a study tour in Belgium, organised by the Internews, under the EU-funded Indo-Pacific Media Resilience Program.

‘This exemption is often used to protect ongoing negotiations or sensitive agreements, particularly with non-EU countries or international organisations,’ she added.

However, Muraro noted that once negotiations are concluded, the justification for maintaining secrecy may no longer apply, subject to case-by-case assessment by authorities or courts.

‘Normally, the Court of Justice holds that once a process is finalised, it should not remain confidential, unless exceptional circumstances exist,’ she added.

Her comments come as scrutiny continues over the defence cooperation MoU signed between Sri Lanka and India in April 2025 during Indian Prime Minister Narendra Modi’s visit to Colombo. The agreement, which the Foreign Affairs Ministry has declined to disclose in detail, is said to formalise existing informal defence arrangements between the two nations.

Officials from both countries have indicated that the MoU covers training exchanges, defence industry collaboration, technology and research partnerships, financial frameworks, and the protection of classified information.

On 22 April, Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said Sri Lanka cannot unilaterally disclose the full contents of the recent Defence Cooperation MoU signed with India without mutual agreement (https://www.ft.lk/front-page/Disclosure-of-SL-India-defence-MoU-requires-Indian-consent-Govt/44-775756).

On 4 August, the Supreme Court dismissed two Fundamental Rights petitions that sought to invalidate the recent MoUs signed between Sri Lanka and India (https://www.ft.lk/news/Supreme-Court-dismisses-petitions-challenging-Sri-Lanka-India-MoUs/56-779916).

This October, elevate your dining experience as Yoroko, perched high above the city on Level 23 at Cinnamon Life at City of Dreams, unveils an exclusive Yakitori Week-a seven-day culinary celebration of Japan’s beloved charcoal-grilled delicacy. From 15 to 21 October, guests are invited to savour a specially curated yakitori platter priced at Rs. 6,000 designed for those who appreciate artisanship, authenticity, and flavour at its finest.

Yakitori-literally meaning ‘grilled bird’ – is not simply food; it is a ritual of fire, smoke, and flavour that has delighted Japan for centuries. At Yoroko, each skewer is prepared with meticulous care, using premium chicken cuts kissed by the heat of traditional charcoal, allowing every piece to emerge with a delicate smokiness and irresistible tenderness.

The platter takes diners on a journey through six distinct cuts, each offering its own story. From the succulent thigh and the light, smoky breast to the golden crackle of crispy skin, every bite is an ode to texture and taste. For those who seek more adventurous flavours, the rich heart and the chewy gizzard bring a depth of character, while the charred wings deliver a juicy and satisfying finale. To heighten the experience, the skewers are paired with up to two portions of fragrant garlic rice-buttery, aromatic and the perfect partner to the smoky richness of the grill.

‘At Yoroko, we reimagine Japanese cuisine with respect for its traditions, while giving it a modern and creative lens,’ says Chef Raisha Fajar. ‘Yakitori Week is more than just dining. It is about creating a sensory journey that embodies joy, sharing, and discovery, inspired by the very essence of our name, yorokobi, meaning joy in Japanese.’

With its breath-taking panoramic views of Colombo, Yoroko is the ultimate setting to immerse yourself in this celebration of Japanese flavours. Whether gathering with friends, sharing a special evening with family, or seeking an unforgettable culinary moment, this limited-time event offers an unparalleled blend of authenticity and artistry.

PMF Finance PLC yesterday announced the appointment of Malik Cader as Chairman of its Board of Directors, effective from 1 October 2025.

This appointment marks a strategic milestone for the company as it accelerates its journey toward becoming a next-generation financial institution in Sri Lanka, the company said.

A seasoned leader in the spheres of regulation, management, and marketing, Cader brings extensive experience and deep insights from his tenure as a respected capital market regulator and corporate strategist.

His appointment is expected to strengthen PMF Finance’s governance framework and unlock new pathways for strategic growth, innovation, and stakeholder value creation.

Under Cader’s leadership, PMF Finance PLC aims to deepen its relationship with its principal shareholder Sterling Investments Ltd., which has a significant international footprint and is one of the largest exporters of Japanese automobiles to Sri Lanka.

This partnership offers exciting potential to explore cross-border financial solutions, leveraging Japanese market access to introduce innovative products, fintech-enabled services, and global investment avenues.

The Board is also currently evaluating proposals to expand PMF Finance into a full-service financial institution, with ambitions to integrate capital market capabilities into its operations.

This vision reflects the company’s aspiration to become a well-diversified financial services provider, aligned with national economic priorities and global trends.

Backed by a high-performing team of professionals, PMF Finance continues to build momentum across its core business verticals. The appointment of Malik Cader signals a confident step forward, anchored in good governance, global thinking, and long-term value creation.