Rs. 10B in unpaid dues threatens Sri Lanka s renewable energy industry survival, warns FRED

The Federation of Renewable Energy Developers (FRED), the main group for renewable energy developers in Sri Lanka and linked with the Colombo Chamber of Commerce (CCC), has issued a warning. They state that the renewable energy industry may face serious problems unless the Government intervenes to fix the financial troubles caused by unpaid dues from the National System Operator (Pvt) Limited (NSO). Payments for renewable energy that goes into the national grid have completely stopped since December 2025. Each month, LKR 2.5 billion is due, leading to a total unpaid amount of LKR 10 billion as of April 2026. Officials from NSO explained that the main reason for this financial issue is that payments for diesel and heavy fuel power generation are being prioritized. This is to cover a daily supply shortfall of about 100MW to 150MW caused by issues in coal power generation since December. The ongoing conflict between Iran and the US has driven the cost of generating thermal power to extremely high levels, reaching or surpassing LKR 100 per kWh. FRED commented, “It is fundamentally unfair that conventional power generators receive preferential treatment for payments while the renewable energy sector is ignored.” They demand that renewable energy developers receive the same payment priority as coal, diesel, and heavy fuel operators. They caution that if expensive fossil fuel power plants are prioritized and renewable energy developers are left unpaid, it could force these operators out of business, creating an even larger supply shortfall. FRED is calling for immediate help from the Treasury and support from the Cabinet to prevent a total collapse of the renewable energy sector, which could harm the wider economy. The Federation also expressed its willingness to collaborate with the government to secure a stable and sustainable energy future for Sri Lanka, but emphasized that immediate financial assistance is crucial to keep energy flowing today.