Sri Lanka introduces continuous power outages as the monetary crisis deepens

COLOMBA, Sri Lanka (AP) – Sri Lankan authorities are introducing full-fledged power outages across the island nation because …

COLOMBA, Sri Lanka (AP) – Sri Lankan authorities are imposing a continuous power outage across the island nation as its deepening financial crisis leads to fuel shortages and disrupts the grid.

Sri Lanka’s utility commission said it would cut off the country’s grid for four and a half hours on Wednesday after a two-hour power outage on Tuesday and Monday. According to officials, the electricity will be cut off alternately between the regions from 8.30 to 22.30.

The regulator said the Ceylon Electric Power Authority had requested permission for the cuts because a fuel shortage had led to a loss of about 700 MW in the national grid. Over the past few weeks, Sri Lankans have experienced several sporadic power outages.

Commission chairman Yanak Ratnayake said that “fuel shortages are causing this problem,” adding that “we have a fuel crisis, not electricity.”

Exhausted foreign reserves are causing Sri Lanka the worst economic crisis in decades. The currency crisis has hampered imports of fuel and other basic necessities from abroad, including milk powder, cooking gas and petrol.

In the last few days, many Sri Lankans have been forced to stand in long lines in the capital Colombo and its suburbs to get fuel for their motorcycles and vehicles. Some gas stations remained closed because they did not receive new supplies.

The pandemic has dealt a severe blow to Sri Lanka’s economy, which is heavily dependent on tourism and trade, and the government estimates losses at $ 14 billion over the past two years. According to the Central Bank, in July-September 2021 the economy shrank by 1.5%. Inflation also rose to 12.1% in December.

Sri Lanka has taken out significant loans and faces $ 12.5 billion in international sovereign bond payments. Officials said the government is gradually increasing its reserves to ensure it can repay its debts.

According to the country’s Central Bank, the government calculated $ 500 million in sovereign bonds in January, and gross official reserves at the end of January amounted to $ 2.36 billion.

Including the latest payment, Sri Lanka has liabilities on foreign loans in excess of $ 7 billion in 2022, including the redemption of another $ 1 billion bond in July.

The electricity crisis has been exacerbated by declining water levels that supply power to the country’s hydroelectric dams.

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