IMF urges implementation of CEB reforms

Friday, 10 October 2025 04:40 - - {{hitsCtrl.values.hits}}

The International Monetary Fund (IMF) yesterday emphasised the importance of continued progress on energy sector reforms, particularly the unbundling of the Ceylon Electricity Board (CEB) and maintaining cost-reflective pricing, as part of Sri Lanka’s Extended Fund Facility (EFF) program.

IMF Mission Chief Evan Papageorgiou told reporters in Colombo: “We are paying close attention to the developments around the unbundling of CEB and the evolution that the energy sector is going to undergo in 2026 and beyond.”

“The reform is a very crucial step meant to bring more transparency and a more efficient function of the energy sector. However, with any reform and any change, there are a lot of details to be ironed out and to be clarified,” he added.

Papageorgiou stressed that maintaining cost-recovery electricity pricing remains a continuous structural benchmark under the IMF program, forming one of the building blocks of the EFF.

“This ensures that, on a forward-looking basis, CEB or a successor company is not incurring financial losses,” he said. “By that, we also mean that this does not become a liability to the taxpayer and to the State.”

He said cost-reflective pricing is essential for containing fiscal risks and supporting long-term economic stability. “It ensures that the electricity company operates on commercial grounds, much like any private company would, and makes sound and operationally good financial decisions,” he added.

Papageorgiou also noted that stable and predictable electricity tariffs and the appropriate setting of these processes are very important, because they pave the way toward lowering electricity prices for everybody and benefiting the economy as a whole.

As part of the ongoing fifth review of the IMF program, the Fund is evaluating the CEB’s tariff submission to the Public Utilities Commission of Sri Lanka (PUCSL) this month.

“We will also assess in the next few weeks the end-November structural benchmark we had set at the time of the fourth review, with respect to reviewing the electricity tariff methodology,” he said.

The IMF Mission Chief reiterated that energy sector reform and cost-recovery pricing are paramount to ensuring fiscal discipline and to preventing future losses that could weigh on the public finances.