Private sector unites to oppose draft Bill to amend Electricity Act

• The Ceylon Chamber of Commerce, National Chamber of Commerce, Joint Apparel Association Forum and Federation of Renewable Energy Developers make joint written submission to Parliamentary Sectoral Oversight Committee on Infrastructure and Strategic Development
• Calls for withdrawal of current draft Bill and new revised draft developed through transparent, multi-stakeholder process
• Insists long-term vision of sectoral transformation be restored to its rightful place at heart of legislation

The private sector has written to a Parliamentary Sectoral Oversight Committee to reconsider the draft Bill to amend the Electricity Act, given widespread concerns over it.

In a joint action, The Ceylon Chamber of Commerce, the National Chamber of Commerce, the Joint Apparel Association Forum, and the Federation of Renewable Energy Developers have made written representation to the Sectoral Oversight Committee on Infrastructure and Strategic Development, listing a host of concerns.

“We remain committed to supporting meaningful reform of Sri Lanka’s power sector. Our input throughout this process has been timely, constructive, and well-documented,” the private sector organisations have said in their letter. However, they urged that the current draft Bill be reconsidered and not tabled in its current form and a revised draft be developed through a transparent, multi-stakeholder process.

The private sector also insisted the long-term vision of sectoral transformation be restored to its rightful place at the heart of legislation.

Following are excerpts of the letter. A collective of Chambers of Commerce and Industry Association write to express our deep concern regarding the proposed amendments to the Electricity Act 2024 from the Gazette published on 16 May 2025. This letter reflects the collective voice of key private sector stakeholders and members of Sri Lanka’s renewable energy community, who have actively and constructively engaged in consultations and submissions throughout the reform process prior to 2025. 

While we acknowledge the Government’s intent to improve sector governance and performance, the current draft Bill raises several critical issues that, if enacted, risk reversing progress, undermining investor confidence, and entrenching inefficiencies that the reforms initially sought to overcome.

1. Re-bundling of the Ceylon Electricity Board (CEB) under the Transmission Company (Transco)

The proposed structure effectively shifts the sector from a single monopoly to a concentrated oligopoly. The allocation of generation and distribution subsidiaries alongside entities such as LTL under a single transmission entity significantly compromises the independence, focus, and accountability that unbundling was intended to achieve. Instead of progressing towards genuine structural reform, this proposal risks institutionalising a more complex, less transparent version of the current system.

2. Removal of safeguards in the unbundling

The removal of the National Energy Advisory Council (NEAC)—a critical statutory safeguard against political or ad-hoc influence—has left a vacuum in independent oversight and policy strategy. 

3. Lack of transparency and incorporation of stakeholder input

Despite multiple detailed submissions, consultations, and representations made by our members, including clause-by-clause analyses, we find that our input has been minimally incorporated into the final Gazette version of the Amendment Bill by the Power Sector Reforms Secretariat. Moreover, substantive changes that were never discussed during consultations have now been introduced, many with significant long-term implications. The decision to withhold the final draft from stakeholders prior to its submission to Cabinet has undermined the spirit of collaboration essential to sound reform.

4. Deviating from long-term legislative objectives

It is fundamental that legislation of this nature be designed to guide sector development over a 20-30 year horizon. Instead, the current draft appears to entrench temporary policy preferences, constraining the ability of future administrations to adapt to evolving market, technological, and environmental conditions.

5. Specific structural concerns in the Amendment Bill

• The proposed structure retains consolidated generation and distribution companies, failing to introduce necessary competition and investment incentives.

• Key safeguards against re-bundling have been removed, including sunset clauses and mandates for eventual corporatisation.

• The inclusion of non-transmission assets and activities (e.g., LTL, LEC) within Transco blurs its mandate and risks operational inefficiencies.

• The proposed absorption of Lanka Electricity Company Ltd., (LECO) into a unified CEB Distribution Company will compromise the independence of LECO to innovate and drive operational efficiencies.

• The independence of the regulator, the Public Utilities Commission of Sri Lanka (PUCSL), is weakened by provisions that allow increased Ministerial discretion, particularly in the tariff setting.

• The principle of “least-cost dispatch,” a cornerstone of affordable power, has been removed, with no clear alternative mechanism for ensuring cost discipline.

• Most concerningly, all references to decarbonisation targets have been removed, sending the wrong signal at a time when energy transition must be accelerated.

6. Development partner concerns

We understand that three of Sri Lanka’s key development partners who are longstanding supporters of energy sector reform have taken the unprecedented step of jointly writing to the Minister and Members of Parliament to express their reservations. Their views echo many of the concerns we raise and signal the serious risk of losing access to policy-based financial support and technical assistance.