Substandard coal supplied to Sri Lanka’s power plants during 2025 and 2026 has cost the sector an estimated Rs. 15.765 billion, Energy Minister Anura Karunathilaka told Parliament, while the state-run Lanka Coal Company has recovered Rs. 16.989 billion from the supplier.
Making a ministerial statement in Parliament yesterday (8), the Minister said coal quality problems during the 2025-2026 period hit both Electricity Generation Lanka (EGL) Private Limited and the National System Operator (NSO) Private Limited. The result was extra spending to keep the lights on and cover shortfalls in power supply.
The NSO bore additional costs of Rs. 8.572 billion to buy electricity that could not be generated because of the poor-quality coal. The EGL spent Rs. 7.192 billion on obtaining extra coal, carrying out essential maintenance and meeting higher handling costs. “The combined loss calculated so far therefore stands at Rs 15.765 billion,” Karunathilaka said.
The Minister said the Government has decided the financial burden will not be passed on to consumers. “As the President and the Government, we said that we would not pass this burden on to the people under any circumstances,” he said.
On the recovery side, Karunathilaka said the Lanka Coal Company has retained Rs. 16.989 billion from the coal supplier through performance guarantees and penalties imposed over the incidents. That figure is slightly higher than the losses calculated so far.
The coal quality issue has been one of the most contentious in the country’s power sector, particularly over coal supplied to the Lakvijaya Power Plant in Norochcholai last year. The controversy led to the resignation of then Energy Minister Kumara Jayakody and Energy Ministry Secretary Prof. Udayanga Hemapala. A Presidential Commission of Inquiry was later appointed to examine past coal procurement and supply processes and the circumstances surrounding the allegations.