Sri Lanka Raises Electricity Tariffs 15 Percent to Secure IMF Funding

Sri Lanka will implement a 15% increase in electricity tariffs starting June 12 as part of conditions set by the International Monetary Fund (IMF) to secure continued financial support under its $2.9 billion bailout program. The Public Utilities Commission of Sri Lanka (PUCSL) approved the hike after public consultations, with varied increases across sectors: industries will face around a 20.5% rise, tourism 20.2%, government institutions 16%, and the lowest domestic consumption block an 8% increase. This tariff adjustment follows a previous reduction of about 20% in late 2024 and aims to address rising operational costs and ensure cost-reflective pricing, a key IMF demand. The hike coincides with the visit of IMF First Deputy Managing Director Dr. Gita Gopinath, marking a significant engagement between Sri Lanka and the IMF focused on macroeconomic stability and governance reforms. The move is regarded as essential for unlocking the next tranche of IMF funds and stabilizing the power sector amid ongoing economic recovery after the 2022 foreign exchange crisis. However, the tariff rise has sparked public concern due to its impact on living costs.