In a statement issued, the multilateral agency said the loan will also help Sri Lanka improve its transmission and distribution network efficiency and also develop renewable energy.
Accordingly, the proposed work includes establishing new transmission and distribution lines, construction and improvement of substations, and other network upgrades to reduce system losses.
Among other works ranks commencing a solar power generation trial which will install rooftop panels in a number of locations including capital Colombo and also in Jaffna Peninsula.
The proposed Solar Power System once in place by 2014 is expected to generate 1 megawatt of electricity.
ADB says, the solar initiative will be developed as a public-private partnership with a $1.5 million credit line for private developers, as well as a $1.5 million grant from the multi-donor Clean Energy Fund under the Clean Energy Financing Partnership Facility, administered by ADB.
“Long-term, Sri Lanka’s challenge is to cut dependence on costly and polluting fossil fuels, and to make its power network more efficient,” Yongping Zhai, Director of the Energy Division of ADB’s South Asia Department was quoted saying in the statement issued by the ADB.
The multilateral donor agency believes that the project will support Sri Lanka’s target of increasing national electrification from 91% in 2011 to 100% by 2015.