Colombo, July 29 (EFE).- Sri Lanka is seeking significant structural reforms to secure access to aid programs for the financial stability of the crisis-stricken country.
Power and Energy Minister Kanchana Wijesekera stated on Friday that the state-owned Ceylon Electricity Board (CEB), Sri Lanka’s main power company, has to be restructured as part of the changes that the new government elected a week ago has recommended.
“CEB needs restructuring & I hope to get the approval of the cabinet to commence the unbundling of CEB with generation, transmission & supply to be separated,” Wijesekera tweeted.
A strategy to lower generation costs by using more renewable energy, he added, was also required for tariff modifications.
Due to the terrible economic crisis, Sri Lanka’s foreign exchange reserves are now completely depleted, leaving the country without enough money to purchase fuel and gas.
Energy shortages have forced strict daily electricity rationing.
The crisis-hit island is now on a challenging road of austerity and put a sustainable policy framework in place.
Political analyst Aruna Kulatunga told EFE that all multilateral agencies await the International Monetary Fund (IMF) to take the lead in the process and negotiate the necessary haircuts in terms of deep and painful structural reforms.
On Thursday, the World Bank said it did not plan to offer new financing to Sri Lanka until the country had an “adequate macroeconomic policy framework.”
“(It) requires deep structural reforms that focus on economic stabilization, and also on addressing the root structural causes that created this crisis to ensure that Sri Lanka’s future recovery and development is resilient and inclusive,” the World Bank stated.
The World Bank’s position echoes that of the International Monetary Fund, with whom the island nation is currently negotiating a rescue program.
The fact that the power ministry took “the first step in a long planned but not executed breakup of the state electricity monopoly” according to Kulatunga, was encouraging.
Sri Lanka is facing the worst economic crisis since its independence from the British Empire in 1948, caused in part by heavy debt, flawed government policies, and the impact of the Easter attacks and the pandemic on tourism. EFE