Sri Lanka imposes rolling power cuts as economic crisis worsens | News


Deepening financial crisis leads to shortages of fuel and handicaps the island nation’s electricity grid.

Authorities in Sri Lanka are imposing rolling power cuts across the island nation as its deepening financial crisis leads to shortages of fuel and handicaps its power grid.

Sri Lanka’s Public Utilities Commission said it will shut off the country’s grid for four and a half hours on Wednesday after two hours of power cuts on Monday and Tuesday.

Electricity will be switched off on a rotating basis between regions between 8:30 am and 10:30 pm, according to officials.

A Sri Lankan workshop ownerA Sri Lankan workshop owner pauses his work and waits during a power cut in Wattala, a suburb of Colombo [Eranga Jayawardena/AP]

The regulatory body said the state-owned Ceylon Electricity Board had requested permission for the cuts as fuel shortages had caused the loss of about 700 MW to the national grid. Over the last few weeks, Sri Lankans have experienced several sporadic power failures.

Utilities commission chairman Janaka Ratnayake said the “shortage of fuel is causing this issue” while adding that “we are having a fuel crisis not an electricity crisis”.

Depleted foreign reserves are driving Sri Lanka’s worst economic crisis in decades. A currency crunch has hindered imports of fuel and other essentials from overseas, including milk powder, cooking gas and petrol.

In the past few days, many Sri Lankans have been forced to wait in long queues in the capital of Colombo and its suburbs to obtain fuel for their motorbikes and vehicles. Some fuel stations remained closed as they have not received new supplies.

A notice written in Sinhala reads "No Diesel"A notice in Sinhala reads ‘No diesel’ at a fuel pumping station during a power cut in Colombo [Eranga Jayawardena/AP]

The pandemic dealt a heavy blow to Sri Lanka’s economy that depends heavily on tourism and trade, with the government estimating a loss of $ 14bn in the last two years. The economy is estimated to have contracted by 1.5 percent in July-September 2021, according to the central bank. Inflation also surged to 12.1 percent in December.

Sri Lanka has borrowed heavily and faces repayments on $ 12.5bn in international sovereign bonds. Officials have said the government is gradually building back reserves to ensure it can honor its debts.

The government settled $ 500m due on sovereign bonds in January and the gross official reserves stood at $ 2.36bn at the end of January, according to the country’s central bank.

Including the latest payment, Sri Lanka has foreign debt obligations exceeding $ 7bn in 2022, including the repayment of another bond worth $ 1bn in July.

The electricity crisis has been worsened by plunging water levels powering hydroelectric dams in the country.



Source link

Leave a Reply

Your email address will not be published.