Renewable energy sources in urban areas create better options for rural folk to gain access to electricity made possible through the approval of a US$40 million financing by the World Bank.
The World Bank on Thursday approved additional financing of US$40 million to strengthen the Government's efforts to bring electricity to remote rural communities and promote private sector investments in power generation from renewable energy sources in urban areas.
"We would like to focus on the provision of energy services to some of the 25 percent of the Sri Lankan population that has no access to electricity at home," said Naoko Ishii, World Bank Country Director. "The grid-connecting capacity will be boosted by a further 50 MW and off-grid electricity services will be extended to 60,000 additional households and 500 rural micro- and small-scale enterprises in rural areas," she added.
The primary goal of the first project was to bring electricity to remote communities and individual households through village-led electricity societies and the provision of solar energy services. The productive use of electricity has resulted in an increase of non-farm incomes of rural households; and improved the delivery of social services such as health and education through customized electricity provisions.
"Sri Lanka has made strong progress in terms of promoting private investments in renewable and rural energy," said Mudassar Imran, Senior Energy Economist and Task Leader for the project. "The additional financing for this project will facilitate the development of the renewable energy sector thereby contributing to the country’s energy development goals."
The initial Renewable Energy for Rural Development (RERED) project provided 74,000 solar home systems to 3200 households and nine schools have gained access to electricity. In these schools computer centers have been established, providing school children with computer facilities. A total of 66,267 households have switched from Kerosene to solar home systems. Additionally 750 business enterprises have benefited from off-grid electricity for various income generating activities.
A valuable gain was the strengthening of the generation supply of the national grid through the support given by private sector-owned mini-hydro, wind, and other renewable energy projects that feed into the grid. The generation capacity added to the national grid through renewable energy technologies by the private sector has exceeded 55 MW (about 2.4% of the installed capacity) within a period of four years.
The initial project components will remain the same during this new funding period and include refinancing support for grid-connected renewable energy, investment in solar power technology (photovoltaic) and further commercialization of village hydro and other community-based independent grid systems. Technical assistance to build capacity to enable communities realize both direct and indirect benefits of electrification remains a vital part of the project.
The credit is provided by the International Development Association (IDA), the World Bank's concessionary lending arm, and has 20 years to maturity and a 10-year grace period.