Sri Lanka to end year-long load shedding with hike in tariff

After enduring a year of load shedding, Sri Lankans will finally receive continuous power this week. However, the relief comes with a catch: a tariff hike in line with the conditions set by the International Monetary Fund (IMF) for the country's much-needed $2.9bn tranche.

The Sri Lankan government's move to end power cuts ranging from 1 to 14 hours, which began in January last year, comes as the country aims to secure a vital loan from the global lender. The President's Media Division announced that President Wickremesinghe has directed officials to ensure an uninterrupted power supply to customers after the tariff revision is implemented.

According to the state power entity, the decision to end load shedding comes at a price. The new tariff rate is necessary to pay off the country's debt and invest in the power sector's infrastructure. Despite the cost, many Sri Lankans are welcoming the return to continuous power.

"The past year has been a nightmare for us," said Colombo resident Ravi Perera. "Load shedding has affected our lives in many ways, especially working from home. I am happy that the government is taking steps to solve the power crisis, but the tariff hike is not going to be easy for us." The tariff increase, which the government says will be proportionate to electricity usage, is expected to hit households, small businesses, and factories alike.

The Sri Lankan government's move to end load shedding, coupled with the IMF loan, is expected to boost the country's economic growth prospects. However, the country's debt-to-GDP ratio remains one of the highest in the region, and its external debt service payments for 2023 are estimated at $4.4 billion. Sri Lanka's leaders say they are committed to implementing structural reforms and improving the investment climate to address the country's long-standing economic challenges.