Colombo, May 7 (Daily Mirror) – Sri Lanka’s renewable energy industry has warned of a looming collapse as unpaid dues exceeding Rs. 10 billion continue to mount, with developers urging immediate government intervention to prevent widespread economic repercussions.

The Federation of Renewable Energy Developers (FRED), the apex body representing renewable energy developers and an associate member of the Ceylon Chamber of Commerce, said payments for electricity supplied to the national grid have been suspended since December 2025.

According to the federation, renewable energy providers are owed nearly Rs. 2.5 billion every month, pushing total outstanding payments beyond Rs. 10 billion by April this year.

FRED President Manjula Perera said the crisis stemmed from authorities prioritizing costly thermal power generation using diesel and furnace oil to offset shortfalls in coal power generation.He noted that the National System Operator (NSO), established under the IMF-backed electricity sector restructuring program, currently lacks sufficient liquidity to settle payments owed to renewable energy suppliers.“The Government must intervene urgently and at least settle 50 percent of the outstanding dues for the industry to continue operating,” Perera said.

Industry officials said daily electricity shortfalls of between 100MW and 150MW have been met through diesel and heavy fuel oil generation following reduced output and operational inefficiencies at coal power plants since December.FRED also warned that global geopolitical tensions, including the ongoing conflict involving Iran and the United States, have significantly increased thermal power generation costs to nearly Rs. 100 per kilowatt-hour, while renewable energy developers supply electricity at less than Rs. 19 per unit.

The federation cautioned that continued delays in payments could force many renewable energy operators out of business, further aggravating future power shortages.The crisis has affected ground-mounted solar, mini-hydro, wind and biomass power projects across the country, although rooftop solar operators remain unaffected.FRED further warned that many developers are now struggling to repay bank loans, raising fears of rising non-performing loans in the banking sector, while more than 10,000 jobs linked to the renewable energy industry could also be at risk.