IMF flags coal quality issues driving Sri Lanka power costs

The International Monetary Fund’s (IMF) Mission Chief for Sri Lanka, Evan Papageorgiou, highlighted issues related to coal procurement and its impact on electricity generation costs in the country at a recent press briefing.

“We understand also that part of the reason why CEB’s production costs have gone higher because of the quality of coal procured and the ability to, the reduced ability to produce efficient, to have efficient production of electricity,” he told reporters in Colombo on Thursday (9).

Responding to a question, he also emphasized the importance of structured fuel supply agreements and clearer operational frameworks to address issues arising in inputs such as coal.

He said that it was important to ensure that fuel supply agreements were in place, and that all generation companies and insurance entities emerging from the CEB unbundling operated in a well-defined manner. 

He added that when issues arose—such as those related to coal or other input materials—there should be clearly defined mechanisms and proper recourse to address such problems in the future.