MANILA -- The Asian Development Bank (ADB) on Wednesday announced a $100 million policy-based loan to further support Sri Lanka's push to strengthen and modernize its power sector.

According to the ADB, the financing builds on earlier initiatives aimed at creating a more stable, efficient, and financially sustainable power sector.

The new loan will accelerate the implementation of the second subprogram under the ADB's energy sector reforms package, which focuses on unbundling the Ceylon Electricity Board (CEB).

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The restructuring mandated by the Electricity Act of 2024 and its 2025 amendment will separate the CEB into independent successor companies handling generation, transmission, system operation, and distribution.

To improve financial sustainability, the program will help implement cost-reflective tariffs and a comprehensive debt restructuring plan for the CEB. It will support the new independent successor companies in the transparent allocation of existing debts.

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"This will continue to strengthen their financial viability, enhance creditworthiness, and enable these companies to operate on a more sustainable footing," the ADB said.

The ADB said it will provide an additional $2.5 million technical assistance grant to support program implementation, build the capacity of successor companies, and help develop their business plans and power system development plans.