AIIB provides $52 million financing to Sri Lanka for the Kerawalapitiya–Port L Second Transmission Line Project, enhancing renewable energy transmission, grid stability, and sustainable development
The Asian Infrastructure Investment Bank (AIIB) has signed a USD 52 million sovereign-backed financing agreement with the Government of Sri Lanka to support the Kerawalapitiya–Port L Second Transmission Line Project. The loan agreement was formalised between AIIB and Sri Lanka’s Ministry of Finance, Planning and Economic Development, according to official disclosures.
The project entails the design, supply, construction, testing, and commissioning of a 220kV single-circuit underground cable linking the Kerawalapitiya Switching Station with the Colombo Port L Grid Substation. This will serve as a parallel line to the existing underground transmission route commissioned in 2019, which is approaching capacity limits amid rising electricity demand in the Greater Colombo region.
The additional line is intended to reinforce grid stability, reduce outage risks, and support the transmission of renewable power generated in the northern and eastern provinces to major consumption centres. The investment aligns with Sri Lanka’s broader efforts to modernise power infrastructure and expand renewable energy integration.
For businesses and investors, enhanced transmission capacity is expected to underpin industrial expansion, support special economic zone development, and improve service reliability for urban commercial users. The project also reflects growing multilateral engagement in South Asia’s energy transition and infrastructure resilience agenda.
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