Mid-term Evaluation Report Sri Lanka - Unido

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2. Project concept and design
2.1 Socio -economic context
Sri Lanka's population was estimated at 18.3 million inhabitants in 1996.
Approximately 75% of which were estimated to live in the rural areas. For 1996, GNP
was approximately $13.8 billion, giving a GNP per capita of approximately $750. In
1993, agriculture has been estimated to account for 18% of GDP. Biomass accounted
for the largest fraction of Sri Lanka's primary energy supplies, and it is consumed
largely in the domestic sector. Hydropower is the next most significant primary
resource with the 1,137 MW of installed capacity generating more than 3,252 GWh
per year. The country had imported large volumes of oil and petroleum products
primarily for the transport sector.
This picture largely remained the same over the implementation period, where in
2000, GNP was approximately $15.1 billion, and the GNP per capita approximately
$829. By 1999, biomass still accounted for the largest fraction of Sri Lanka's primary
energy supplies (51.1%), and hydropower remained to be a significant primary
resource with the 1,150 MW of installed capacity generating more than 3,194 GWh in
the year 2000. The share taken by oil and petroleum products has increased by
approximately 5.3%, largely owing to the increased dependence on it for power
generation.
2.2 Development problems addressed by the project
The project has been designed to address two key barriers hampering the expansion of
renewable energy and energy conservation activities. These are:
• Lack of familiarity of the private industrial sector and the financial community
with renewable energy projects in general and the resource potential
specifically; and
• A need for skilled indigenous capacity in design/implementation for both
energy efficiency and renewable energy projects.
Though the technologies related to the energy efficiency and renewable energy
projects remained almost static over this period, an active trend of embracing these
technologies by the public and the industry is observed. This is considered as a natural
reaction to the rising costs of energy in Sri Lanka.
2.3 Power sector policy in Sri Lanka
Several changes in the Government’s power sector policy, as enunciated in the Power
Sector Policy Directions (1997) had stimulated the above trend. In a parallel
development, since 1996, the Ceylon Electricity Board (CEB) had commenced
purchasing electricity from small power producers under a standardized programme.
As the basic policy, the Power Sector Policy Directions aims at sustaining an adequate
level investments in the power sector at all times by harnessing the private sector
investments into the power generation sector. It also states that the hydro power
Final report, 4 May 2001
Mid-term evaluation report: 'Renewable energy and energy capacity building'