Sri Lanka eyes green H2 to rebuild economy

Sri Lanka is developing regulation to lure green hydrogen and renewables projects to the country as it seeks to rebuild its ailing economy, its president Ramil Wickremesinghe said.

Colombo will announce new green energy policies in the next two months as it hopes to establish itself as a renewable hydrogen frontrunner in Asia, Wickremesinghe said at the Sri Lanka Green Energy Summit this week. It could export green hydrogen products from the port of Trincomalee in the north of the country, where the best conditions for renewables projects are found, he said.

Wickremesinghe asked investors for their views on how to best regulate renewable energies to create an attractive business environment. "We want to be one of the first countries in this field and therefore we must have legal and administrative framework," he said.

Sri Lanka has roughly the same solar energy potential relative to its size as southern Indian states like Tamil Nadu, Kerala, Andhra Pradesh and Karnataka, where numerous projects are planned, data from the World Bank's Global Solar Atlas show. Moreover, according to the bank's Global Wind Atlas, the potential to produce energy in the windiest part of Sri Lanka is roughly double compared with the windiest portion of Andhra Pradesh and 80pc higher than in Karnataka, albeit lower than in Tamil Nadu.

But investors at the summit asked for assurances about political stability in Sri Lanka, which was a key concern, they said. Wickremesinghe took charge last year after the country defaulted on its debt and entered an economic crisis with roughly 50pc inflation and shortages of food, fuel and medicines, which ultimately led to protestors ousting then president Gotabaya Rajapaksa.

Wickremesinghe is developing legislation that would force Sri Lanka's government to stick to the fiscal rules set out in the $3bn bail out from the IMF for the four years of the loan programme and beyond, he said. The IMF deal restructures debt and will "unleash the growth potential of Sri Lanka," he said. Investors would get good returns while helping grow the Sri Lankan economy and the government is working to accelerate investment procedures, he added.

By Aidan Lea