… warn of dire consequences

A group of trade unions and civil society groups has requested President Anura Kumara Dissanayake to abandon his government’s controversial plan for the proposed tripartite management of the EPF.

The group has told the President: “We strongly object to the government’s plan to transfer the EPF to a tripartite board—jointly promoted by the Employers’ Federation of Ceylon (EFC), International Monetary Fund (IMF) and the International Labour Organisation (ILO)—and to increase the investments of those funds within private equity and debt markets.

“While the EFC and the government jointly project this plan as a ‘modern governance framework’, it poses a serious threat to the EPF’s financial stability, fiduciary conduct, and returns to workers’ life savings, with severe consequences for broader macroeconomic stability. Rather than replacing the corruption existing in the public sector, this tripartite framework paves the way for a corporate takeover of the EPF. Through this, the fund is exposed to unlawful business practices such as insider trading using internal information of EPF investments, conflicts of interest and corporate bailouts of unstable private companies.

“Sri Lanka’s corporate sector has a tremendously negative track record, which you alluded to during your victorious election campaign in 2024. This was recently unravelled by the multi-billion-dollar illicit capital flight through trade misinvoicing, which your administration is now actively working to curb in the imports sector.

“The recent banking sector fraud exceeds Rs. 13 billion; widespread corporate tax evasion destabilised the fiscal position (Sri Lanka Auditor General’s Department Annual Reports) and consequently inflated the tax burden on the general public. The EFC has found it convenient to remain silent about these crimes, possibly assuming that their silence would preserve their social standing. Considering this inherent corruption within Sri Lanka’s corporate sector and its disregard to the living standards of the general public, there is no realistic basis to integrate corporate interests to actively manage the EPF. The corporate sector of Sri Lanka has not developed sufficiently on technical and ethical grounds to safely entrust the largest retirement savings pool in the country. The EPF is a captive fund that has no mechanism for the owners to divest if the management is corrupt. This further increases the possibility of corporate fraud when the management of the fund is jointly held with the corporate sector.

“Furthermore, during the recent public discussion with trade unions, Deputy Minister of Finance Dr. Anila Jayantha pointed out that the domestic debt restructuring (DDR) would inflict a loss of Rs. 600 billion to the EPF. Our independent calculations—formally submitted as an affidavit to the Supreme Court approved by the Federation of University Teachers’ Associations in 2024—reveal that nominal loss alone is Rs. 634.4 billion. When factoring in foreclosed reinvestment returns, the true loss skyrockets to Rs. 1,711 billion, wiping out 48% of the fund’s projected gross income for the 2023 – 2028 period. Under the pretext of safeguarding the banking system, this colossal robbery preserved high yields on government bonds held by commercial banks and high-net-worth individuals, subsequently reaping them astronomical profits. Now, the exact same plunder is rearing its head again disguised as a tripartite committee.”

“The main arguments supporting our resistance and viable alternatives for optimising EPF management directly under the Central Bank of Sri Lanka (CBSL), are outlined below.

“Objections to the government’s tripartite proposal:

1. The “International best practice and conflict of interest fallacies”

The government holds that tripartite management of pension funds is the “international best practice” and that there is a “conflict of interest” in CBSL managing the EPF. They are key pillars justifying government’s tripartite proposal.

These two positions are shockingly misleading given that four of the five largest pension funds in the world, in Norway, Japan, the U.S., and Singapore, are managed directly by state bodies or central banks. Therefore, ‘international best practice’ in pension fund management is the exact opposite of what the government and the IMF are proposing. We hence reject these baseless positions.

2. Corporate captivity and bailouts

It is clear that the EFC is desperately pushing for this proposal at a time of global uncertainty, to cushion the effects of the crisis and maximise gains. Under corporate influence within the proposed tripartite board, the private conglomerates can use the multi-trillion-rupee EPF to continue their unstable commercial operations without having to risk their own capital or savings to do so. This will severely erode the financial stability of the EPF and its returns.

3. Risk of front running

“Because the EPF is a colossal fund, its investment decisions can alter asset prices. This creates immense monetary value for the information generated by its investment decisions. Corporate representatives on the proposed tripartite board will be perfectly positioned to use this information to trade ahead of the EPF (front-running), buying assets cheaply and dumping them onto the EPF at inflated prices for guaranteed corporate gain, resulting in a reduction of returns to the EPF.

4. Unavoidable loopholes

“Presence of a separate group of investment analysts, trade union representatives and government officials within the proposed tripartite structure cannot prevent pre-market corporate access to EPF’s investment decisions. Investment proposals made by the analysts has to be first approved by the proposed tripartite committee, making it impossible to prevent corporate access to insider information on EPF investments.”

A two-member bench comprising Court of Appeal President Justice Rohantha Abeysuriya and Justice Sarath Dissanayake yesterday (1) dismissed a writ petition filed by former President Gotabaya Rajapaksa seeking judicial intervention to prevent his arrest under the Prevention of Terrorism Act (PTA) in connection with the ongoing investigations into 2019 Easter Sunday terror attacks.

The writ petition was rejected in limine.

In the petition, the former President cited Inspector General of Police Priyantha Weerasooriya, Criminal Investigation Department (CID) Director Shani Abeysekera, the Officer-in-Charge of the CID’s Special Investigations Unit and the Attorney General as respondents. The ex-President sought the court intervention after the arrest of former head of the State Intelligence Service (SIS) retired Maj. Gen. Suresh Sallay over the Easter Sunday attacks.

Since then , former Director of Directorate of Military Intelligence (DMI) has been named as a suspect.

Earlier, the Fort Magistrate’s Court imposed a travel ban on him in relation to investigations stemming from allegations made by Asad Moulana in the Channel 4 documentary on the Easter attacks.

Government approves USD 57.4 million financing package — then moves to scrap net metering for new rooftop solar connections

By Ifham Nizam

Questions are mounting over the Government’s policy consistency after Sri Lanka secured a USD 57.4 million Asian Development Bank (ADB) financing package for a rooftop solar aggregation and virtual net metering project, while the Energy Ministry has subsequently directed that new rooftop solar connections operate exclusively under the Net Plus scheme.

The issue is not simply whether conventional Net Metering and the ADB-funded Virtual Net Metering (VNM) project are technically identical. They are not. The more fundamental question is why the Government negotiated and approved an ADB project specifically designed around a virtual net metering model and then introduced a major policy change affecting the country’s broader net-metering framework.

The ADB approved the USD 57.4 million financing package on June 25, 2026, comprising a USD 35 million

concessional loan, USD 16.9 million in grants from the European Union and USD 5.5 million from the Japan Fund for the Joint Crediting Mechanism. Counterpart funding brings the total estimated project cost to USD 80.5 million.

The project is intended to establish a utility-led rooftop solar aggregation and VNM model through Electricity Distribution Lanka (EDL) and Lanka Electricity Company (LECO). Under the model, electricity generated from large rooftop solar installations would be pooled and credits virtually distributed to eligible consumers.

The project is therefore not a proposal that emerged outside the Government’s policy framework.

Cabinet approved negotiations with the ADB and other development partners for the project on November 3, 2025. Following the negotiations, Cabinet approved the agreements for a USD 35 million ADB concessional loan and USD 5.5 million Japanese grant, together with a EUR 15.4 million EU grant.

The ADB project itself was approved on June 25, 2026, and remains listed by the Bank as an approved project, with EDL and LECO identified as the executing agencies. ADB records also show that project tenders were subsequently issued in June 2026.

Yet, on September 11, the Energy Ministry issued a directive to EDL discontinuing Net Metering and Net Accounting for new rooftop solar connections and extensions, with new agreements to operate under Net Plus. The directive applies to grid clearances granted after September 11, while existing agreements are to continue under their existing terms.

This has prompted a crucial question among energy-sector stakeholders:

If the Government had already approved and negotiated an ADB project centred on virtual net metering, why was the country’s rooftop solar policy subsequently changed in a manner that removes two established net-metering options for new customers?

A senior energy-sector official, speaking to The Island, said the Government must clarify whether the September policy decision has any implications for the ADB-funded project.

“The important issue is policy consistency. If the Government negotiated an internationally financed project based on a virtual net-metering model, there must be a clear explanation of how the subsequent policy decision fits into that project,” the official said.

The official stressed that Virtual Net Metering should not be confused with conventional Net Metering.

The ADB project involves a utility-led model in which rooftop solar PV systems installed and owned by the utilities generate electricity that can be virtually allocated to eligible consumers. The project is also intended to modernise distribution networks and establish the infrastructure required to support the system.

However, another authoritative energy-sector source questioned whether the policy change had been fully reconciled with the ADB project during the Government’s decision-making process.

“The question is whether the regulatory assumptions and policy framework under which the project was negotiated remain unchanged. If they have changed, the Government should explain whether the ADB was consulted and whether any project documents or implementation arrangements have to be revised,” the source said.

The chronology is significant.

November 3, 2025: Cabinet approves negotiations with the ADB and other development partners for the Rooftop Solar Aggregation and Virtual Net Metering Project.

June 25, 2026: ADB approves the project.

June 26, 2026: ADB announces the USD 57.4 million financing package, with the total project cost estimated at USD 80.5 million.

June-August 2026: Project procurement proceeds, with ADB records showing tenders for the project.

September 11, 2026: The Energy Ministry directs EDL to discontinue Net Metering and Net Accounting for new rooftop solar connections and extensions.

The timing raises questions about coordination between the Ministry of Energy, the utilities and the agencies involved in negotiating the ADB financing.

An energy-sector policymaker told The Island that the Government should make clear whether the new policy affects the VNM component of the ADB project.

“There is a distinction between Net Metering and Virtual Net Metering. But when a major externally financed project is specifically designed to establish a virtual net-metering business model, any major change to the national rooftop solar policy needs to be transparently explained,” the policymaker said.

The ADB describes the project as a mechanism to help consumers who lack either the financing or suitable rooftop space to benefit from solar power through a virtual net-metering mechanism using rooftop solar PV systems installed and owned by the two utilities.

The Government’s latest rooftop solar policy, meanwhile, moves new customers towards Net Plus. Under Net Plus, electricity generated by a rooftop solar system is sold to the utility separately from the electricity consumed by the customer; generation and consumption are therefore treated as separate transactions.

This makes the Government’s explanation particularly important because the ADB project is designed to create a new utility-led VNM model, rather than simply preserve the existing household Net Metering arrangement.

The Government has not publicly stated, in the material examined by The Island, that the ADB financing has been cancelled or suspended. The ADB continues to list the project as approved.