The sovereign-backed financing will fund the design, supply, construction, testing, and commissioning of a 220 kilovolt (kV) single-circuit underground cable system. This new line will link the Kerawalapitiya Switching Station with the Colombo Port L Grid Substation, complementing the first underground cable along this route, which was commissioned in 2019.
The project aims to enhance the reliability and capacity of Sri Lanka’s electricity transmission network, enabling smoother power flow and supporting the country’s growing energy demands. The underground design is expected to improve operational resilience and reduce maintenance requirements compared with overhead lines.
AIIB noted that the loan reflects its continued commitment to sustainable infrastructure development in Sri Lanka. The bank has previously supported five projects in the country across the energy and urban sectors, providing a total of $534 million in financing to drive economic growth and development.
The Kerawalapitiya–Port L project is expected to strengthen grid stability, reduce transmission losses, and support long-term energy planning. By connecting key substations through a modern underground system, the initiative also aligns with Sri Lanka’s broader objectives for reliable and resilient power supply.
This financing underscores AIIB’s role in supporting infrastructure modernization in Asia, particularly in energy transmission, where improved networks are essential for economic development and urban growth. The successful commissioning of the first underground cable in 2019 demonstrated the feasibility and benefits of such systems, paving the way for the expansion with the second line.
Once completed, the project will provide redundancy and increased capacity along the Kerawalapitiya–Port L corridor, ensuring that electricity supply remains stable even during peak demand or maintenance activities. The underground design also minimizes environmental and visual impacts, aligning with sustainability goals.
With this project, Sri Lanka is expected to enhance energy security and operational efficiency while fostering conditions for future grid expansions. AIIB’s financing is a key step toward supporting long-term, resilient infrastructure that can accommodate growing urban and industrial electricity consumption.
The project is anticipated to contribute significantly to Sri Lanka’s efforts to modernize its energy network and strengthen connectivity between critical substations, supporting both domestic consumption and broader economic development.
