High-level Cross-Cutting Insights for Sri Lanka

Sample investment opportunity area Grid-connected solar power generation 11 Business Model: Invest in or provide project financing for large-scale ground-mounted and floating Solar PV power generation and supply the generated capacity to the national grid for both, residential and industrial/commercial consumption. Renewable Energy & Alternative Resources Solar Technology and Project Developers 7 AFFORDABLE AND CLEAN ENERGY 12 RESPONSIBLE CONSUMPTION AND PRODUCTION 9 AND INFRASTRUCTURE INDUSTRY, INNOVATION 11 AND COMMUNITIES SUSTAINABLE CITIES 13 CLIMATE ACTION DEVELOPMENT NEED • The dependence on imported fossil fuels is a critical challenge and has adverse impacts on energy security • Yet, there is a huge renewable energy (RE) resource potential, estimated as 133 GW. • ☑ EXPECTED DEVELOPMENT OUTCOMES Large scale deployment of solar energy will replace imported fossil fuels. • An effective way for the required transition towards a carbon zero economy, by 2050 and ensure sustainable development. • STAKEHOLDERS IMPACTED © Corporates: Industrial or commercial use of solar rooftop based electricity will enable corporates to reduce their electricity expenditure in the long-run. Exporters will benefit in meeting supply chain standards. • Small businesses that are part of the energy value chain and other businesses/households with round the clock need for electricity IMPACT MANAGEMENT PROJECT IMP CLASSIFICATION C: Contribute to Solutions given solar-based electricity generation will serve household, commercial, industrial, e-mobility needs and increase the proportion of RE in the total energy mix. 0·00 ECONOMIC CONSIDERATIONS • Out of the RE capacity of 8,560 MW, estimated to be achieved by 2030, Solar PV capacity of 4,600 MW is expected through rooftop, floating and ground-mounted systems. • • Projects related to solar can lead to IRR and ROI of between 15-20%. ENABLING FACTORS Sri Lanka Green Finance Taxonomy by CBSL in May 2022 is expected to enable financial market participants to raise low-cost funding for green activities through both domestic and foreign markets INVESTMENT TIMEFRAME Government has calculated a 6-year payback period. The short span of time firms have taken to be successful is testimony to this. Source: Sri Lanka SDG Investor Map, 2022, UNDP. RISK FACTORS Although locations have been identified, environmental approvals will have to be obtained by individual developers. For solar projects over 10MW it will be carried out through competitive bidding ⚫ If targets are not achieved there will be more dependence on fossil fuel which could result in higher consumer tariffs.

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