ECONOMYNEXT – Sri Lanka has opened the floodgates to corruption by ending tenders for private renewable power plants, says opposition lawmaker Harsha de Silva, who has tried to limit high feed-in tariffs to only power plants of less than 10 megawatts.
“Due to non-transparent procurement and corruption, we are paying far more than necessary for electricity,” de Silva said in a post on twitter.com after the ruling party rejected his proposal to limit corruption in procurement.
“One positive was the requirement for competition in renewable energy projects, but there were delays. Instead of solving the problem, they eliminated the competition. Horrible decision.
It will be interesting to see how the IMF, World Bank, AfDB view this absolutely unacceptable new development in #SriLanka.
“It’s 180 degrees opposed to donors wanting us to beg for money. It will open the floodgates for corruption.
Some observers say Chinese funding created a class of entrepreneurs in the country who were able to influence the country’s policy, but Western donor agencies promoted the renewable energy lobby at a time when their prices were not competitive, which enabled them to develop means of influencing public policy.
In many developed countries, the renewable energy company has had to resort to public relations, sometimes referred to as “greenwashing”, to obtain special subsidies from politicians and influence public policy.
However, renewable technologies have now matured and developing countries can use them at market rates and the most cost-effective technologies are also emerging, allowing networks in poor countries to manage an unstable supply from highly volatile renewable sources.
Under then-minister Ajith Perera, renewable energy feed-in tariffs collapsed in competitive bidding allowing investors without political influence to enter the renewable energy sector.
Defying conventional wisdom, prices for small mills were lower than expected despite their small size due to lower barriers to entry in the form of required investment.
Sri Lanka’s Podujana Party with former Prime Minister Mahinda Rajapaksa voted 120 votes for and 36 votes against scrapping tenders for renewable power plants.
There were 13 abstentions.
De Silva’s amendment to limit higher prices only to plants under 10 megawatts was also rejected.
Recent tenders have also not been approved by the political authority pending the removal of tenders, the unions have accused.
Meanwhile, Energy Minister Kanchana Wijesekera said that CEB unions have blocked renewable energy projects and that is why the electricity law has been amended and electricity cheaper than thermal energy would be introduced.