WindForce, Sri Lanka’s largest private-sector renewable-energy developer, plans to more than double its generation capacity from 253MW by 2029. Manjula Perera, its Managing Director, says bank debt will fund most of the expansion. Lenders typically cover 70–80% of project costs.
New rules under the 2025 amendment to the Electricity Act will allow developers to sell power directly to consumers, Perera adds, eventually ending the firm’s dependence on the National System Operator, the country’s sole electricity buyer.
Perera argues that renewable energy is not to blame for Sri Lanka’s high power bills. Oil-fired thermal plants supply just 14% of the grid’s energy but account for 40% of its cost, he says, and pairing solar and wind with battery storage could cut 30–40 rupees off the cost of every unit presently generated by oil-fired electricity.
An interview with WindForce’s Managing Director, Manjula Perera.
WindForce aims to double its electricity generation capacity from 253 megawatts, with three or four projects slated for completion between 2027 and 2029. This is a capital-intensive business. How will you fund this growth, particularly after the debenture issue planned for early 2026 didn’t materialise?
Our capacity was 253 megawatts until the end of September 2026, when we commissioned our first 10-megawatt battery energy storage project alongside Sri Lanka’s first floating solar plant, a 5-megawatt installation. Those two additions lifted capacity to 268 megawatts. Over the next two to three years, we plan to feed a further 300 megawatts into the national grid, and that pipeline demands substantial investment.
In capital-intensive projects of this kind, bank debt typically covers 70–80% of the cost. Our track record earns us strong credibility with commercial banks, so raising debt poses no difficulty.
The real challenge lies in the remaining 20–30%, which we must fund through equity. In 2026, the International Finance Corporation (IFC), the private sector arm of the World Bank, committed $18 million in Sri Lankan rupee equivalent to WindForce. We will channel $10 million of that into one of our largest undertakings, the 100-megawatt solar project now under construction in Siyambalanduwa.
Even so, a shortfall remains. As you point out, we had planned a green bond and had everything in place. Then market conditions shifted, and interest rates climbed. Even green bonds now command around 12–13%, a rate that holds little appeal for us. We are therefore exploring alternative ways to bridge the gap.
Revenue will also play its part. As our new projects come online, the income they generate will finance a portion of our expansion. We also still hold the remaining $8 million from the IFC facility, which we can deploy towards future projects.
Will the new Electricity Act, passed in 2024 and amended in 2025, impact WindForce?
The legislation has no bearing on how we raise capital. In the long run, however, it works in our favour.
The 2025 amendment paves the way for open access and power wheeling, which will allow developers to sell electricity directly to buyers across the national grid. These options will accelerate renewable energy penetration and give developers like us access to a broader customer base, freeing us from our dependence on the single-buyer model.
You mentioned the single-buyer model.
“Even green bonds now command around 12–13%, a rate that holds little appeal for us. We are therefore exploring alternative ways to bridge the gap.”
As you double your capacity, who will buy this power, presumably the National System Operator (NSO), and at what price? What tariff would you consider favourable?
The tariff depends on the technology. Solar commands one rate, wind another, and battery storage yet another. Sri Lanka enjoys excellent wind regimes, which gives the country strong wind potential in its own right.
But the bigger picture matters more than any single tariff. Sri Lanka has set a policy target of sourcing 70% of its electricity from renewables by 2030. To that end, the NSO has published an interim generation plan for 2027–2029, which identifies 1,400 megawatts of additional solar capacity, both ground-mounted and rooftop, along with 1,000 megawatts of battery energy storage for the national grid.
That plan opens the field to many players in renewable energy development, not just us. The 1,400 megawatts of solar alone will require around Rs280 billion in investment, while the battery storage will need a further Rs114 billion. Together, the industry must mobilise roughly Rs394 billion between 2027 and 2029.
WindForce trades at a relatively higher price-to-earnings ratio than other companies in the sector. Am I right in suggesting this effectively allows you to raise money more cheaply relative to earnings? How does it affect your ability to fund these projects?
At our IPO, the share price stood at just Rs16. Within five years, it has nearly tripled. Our price-to-earnings ratio runs high because investors are pricing in the company’s future growth, particularly the 300 megawatts we plan to add. That outlook drives the valuation.
When it comes to raising funds, WindForce draws on a few key strengths.
First, we remain the largest renewable energy developer in the country, and we have consistently delivered our projects on schedule, most of them ahead of time. That record gives us considerable credibility.
Second, we have the IFC behind us. Before the IFC partners with any organisation, it typically conducts a rigorous due diligence process that lasts at least two years. Clearing that bar sends a powerful signal to the market. Once the IFC came on board, commercial banks began to view us differently. We now secure longer tenors on our loan facilities, at lower rates than before.
Third, IFC’s backing also smooths our path to international funders such as development finance institutions (DFIs), which no longer need to put us through a fresh round of due diligence.
The NSO pays you in rupees, but some of your borrowing is in dollars?
No, we borrow only in Sri Lankan rupees. We do not take dollar loans from commercial banks to finance projects with rupee tariffs.
Some of our large-scale projects do carry dollar-pegged tariffs. Our 100-megawatt Siyambalanduwa solar project, for instance, earns its tariff in US dollars, as does our 50-megawatt Mullikulam wind power project. Even so, we have financed both through rupee borrowings.
We borrow in US dollars only for our overseas projects, where the tariffs are also denominated in dollars, so the currencies match.
“When it comes to raising funds, WindForce draws on a few key strengths. First, we remain the largest renewable energy developer in the country, and we have consistently delivered our projects on schedule, most of them ahead of time. That record gives us considerable credibility.”
Do you earn enough dollar revenue to offset your foreign currency debt exposure?
Yes. In Pakistan, we operate two solar projects, one of 50 megawatts and another of 18 megawatts, both of which generate revenue in US dollars. In Uganda, we run three power plants, two hydro and one solar, which also earn in dollars. Our solar project in Ukraine, meanwhile, brings in revenue in euros.
WindForce enjoys margins of around 40–50% since listing, with a net margin of roughly 27%. Yet your return on equity (ROE) averages about 8–9%. Is that a healthy figure for your industry, and is it sufficient to attract the capital you need for your growth plans?
Our margins were stronger in the early days, when the industry faced little competition. As more players enter the market, those margins will narrow.
But renewable energy is a long-term business. Once you sign a 20-year power purchase agreement, you lock in your returns for the entire term. You need no marketing, and the risk lasts only until you construct and commission the plant. After commissioning, you are through the hardest part. Operating and maintaining these plants involves relatively little complexity.
So investors cannot expect the kind of returns a trading business might deliver. What they gain instead is a stable, long-term investment.
If you sign a 20-year power purchase agreement (PPA), do the loans you take to complete that project also run for about 20 years?
Loan tenors depend largely on the credibility of the developer. When we entered the industry in 2010, banks offered tenors of only seven to eight years. As the industry matured, those tenors stretched to 10 years. Today, with WindForce established as a reliable partner, we secure 13–14-year tenors for our 20-year projects. Now that the IFC has come on board, we expect those tenors to extend to 17 years.
What does electricity demand look like for you, given that you have just one buyer? Where do you see gaps in the current energy mix, what mix does the buyer want from you, and which kinds of plants will it prioritise over the next 10 years?
Sri Lanka has around 7,200 megawatts of installed generation capacity. Rooftop solar accounts for 2,500 megawatts of that, roughly a third. That is a significant figure, and it brings its own challenges, because the grid cannot control 2,500 megawatts of capacity.
Ground-mounted solar contributes another 534 megawatts, and small renewables add a further 450 megawatts. Together, rooftop solar, ground-mounted solar and wind come to about 3,500 megawatts. Add 1,512 megawatts of large hydro, and green energy makes up around 5,000 of the country’s 7,200 megawatts.
People then ask a fair question: why does our electricity bill remain so high? Over the past three years, renewables supplied roughly 54% of the country’s energy. The problem lies not with that 54% but with the remaining 46%. Renewables account for only about 30% of the total generation cost, while the other 46% of energy consumes 71%.
Last year, the Ceylon Electricity Board’s (CEB) oil-fired thermal power plants generated about 9% of the country’s energy, and independent power producers’ (IPP) thermal plants generated about 5%. That 14% from oil-fired plants alone accounted for 40% of the total cost. Energy from CEB thermal plants costs around Rs47 per unit, while IPP thermal energy costs about Rs94, bringing the average to roughly Rs80.
Until we cut that 14% from thermal plants, we cannot bring down the electricity bill. The only solution lies in reducing our dependence on oil and replacing it with renewables paired with battery energy storage. The combined cost of renewables and storage can comfortably fall between Rs40 and Rs50 per unit, saving Rs30–40 per unit against oil-fired thermal power. That is the only way to lower electricity bills.
Research shows that Sri Lanka’s electricity tariffs, at least at the 300-unit mark, rank among the highest in South Asia. How do prices compare across the region today, and how can the private sector and new technologies help bring costs down?
Our industrial tariffs sit well below those in the rest of Asia. What runs high is the domestic tariff for households consuming above 180 units. Those consumers effectively subsidise households that use less, since the state subsidises consumption below 180 units.
That reflects a policy decision. Until policymakers move to a cost-reflective tariff, where every consumer pays the true cost of each unit, domestic electricity prices will remain high.
As for bringing tariffs down, the answer lies, as I explained, in renewables paired with battery storage, with the balance tilting further towards renewables.
The government has already taken steps in that direction. The first 160 megawatts of battery storage have reached the commissioning stage. In mid-September 2026, the government floated a tender for a further 250 megawatts of batteries, which it will award and connect to the grid by mid-2027. In late September 2026, it floated another tender to add 150 megawatts of storage to existing solar power plants. Once awarded, those projects can move very quickly because the infrastructure already exists at these sites.
We are moving in the right direction. Within the next one to two years, we should be in a position to bring down the price consumers pay.
“Before the IFC partners with any organisation, it typically conducts a rigorous due diligence process that lasts at least two years. Clearing that bar sends a powerful signal to the market. Once the IFC came on board, commercial banks began to view us differently.”
Is Sri Lanka building a regulatory framework that drives greater competition? If the market opens up to larger regional players, could that help bring down electricity costs, and would you support such a move?
Definitely, but to attract larger players, the country must address a few things first.
First, our power purchase agreements must become bankable. At present, they fall far short of what lenders require. International organisations such as the IFC and the World Bank should work together to ensure that tenders rest on bankable documents from the outset.
Second, tariffs for large players must be pegged to the US dollar. Without that, foreign investors cannot protect their returns.
Third, the approval process needs an overhaul. As a Sri Lankan company with a long history in the industry, we know how to navigate the system. Even so, we must secure approvals from around 17 organisations before we can begin construction on a renewable energy project, a process that takes at least a year. No foreign investor will wait that long. The country needs a clear-cut, one-stop-shop approval process.
“Over the past three years, renewables supplied roughly 54% of the country’s energy. The problem lies not with that 54% but with the remaining 46%. Renewables account for only about 30% of the total generation cost, while the other 46% of energy consumes 71%.”
The CEB has undergone restructuring to bring greater cost transparency and to open the sector to investment and competition. What does this mean for your profit and loss statement, and how must you prepare to meet shareholder expectations?
The restructuring of the CEB was long overdue. The new entities now operate as limited liability companies, which makes them accountable and pushes them to think like the private sector.
We have already seen the benefits. Our direct dealings are with the National System Operator, and payments have improved markedly. During the financial crisis, our payments fell overdue by as much as 14 months. That gap later narrowed to six or seven months, and then to around four. Since the NSO came into place, it has shrunk to two months, which marks decent progress.
Much work remains, however. What the system lacks is coordination between the NSO, the distribution company, the transmission company, the generation company and, above all, the regulator, the Public Utilities Commission of Sri Lanka (PUCSL). At present, these bodies operate somewhat in isolation. It is still early days, and they must work through their systems and bring everything into alignment.
Now that the unbundling of the CEB is under way, how can the reforms move beyond cost transparency? What should the next steps be?
The next major step, before the market opens up fully, is power wheeling, which the new Electricity Act already permits.
Power wheeling allows a generation company like ours to sign up consumers directly and agree to sell them electricity, moving it from point A to point B. We would pay only for transmitting that power through the grid from our plant to the consumer. The regulator would play a central role in calculating the wheeling charge. We are already late, but it must happen.
The ultimate goal is open access, a market-driven model that India has also adopted. Only then will real competition take hold.
Battery storage lets you generate power and store it for later, rather than dispatching it the moment you generate it. Did the change in the act motivate your move into battery storage?
Not really. The opportunity came through an international tender. The utility identified a need for battery energy storage at 16 locations across the country, and we won 13 of them through competitive bidding. The utility has since recognised that the grid needs even more storage to supply power during peak hours and reduce thermal generation.
This approach is called peak shifting. Renewable sources such as solar generate large amounts of cheap energy during the day. Batteries store that energy, and at night, instead of firing up heavy, costly thermal power plants, the grid draws on the stored power.