National Energy Policy and Strategies of Sri Lanka The increased penetration of indigenous resources, reduced consumption of fossil fuels, and diversification into cheaper fuels are the few options available to Sri Lanka. To address these issues, the National Energy Policy and Strategies (NEPS) in 2006 identified the development of renewable energy sources, and demand-side energy efficiency improvements, as major strategic pillars. A 10-year development plan to implement the NEPS aims to:increase the percentage of households electrified through off-grid supply from 4% at present to 10% by 2016,increase the share of unconventional renewable energy in on-grid power supply from 4.1% at present to 10.7% by 2016,add 500 MW of renewable energy capacity by 2016,introduce labelling of appliances for energy efficiency by 2010, andupdate and make mandatory energy-efficient building codes by 2009.The Government’s strategies updated in 2010 aim to :(increase supply capacity of the system to 3,470 MW by 2012 and 6,367 MW by 2020 and reduce the generation cost by adding aggregate base load capacity of about 2,000 MW of three coal-fired plants;increase the share in grid energy supply from nonconventional renewable energy sources from 4.1% in 2007 to 8.5% by 2012, 10.0% by 2016, and 20.0% by 2020;increase the percentage of households connected to the grid from 88.0% in 2010 to 100% by 2012;reduce the total technical and commercial losses of the transmission and distribution network from 14.6% in 2009 to 14.0% by 2012, 13.0% by 2016, and 12.0% by 2020; andachieve energy savings of 4.3% in 2012, 6.4% in 2016, and 8.7% in 2020 from a potential consumption level through energy conservation. Renewable Energy for Rural Economic Development (RERED)With the support of the World Bank, this project has financed installation of 74,000 solar power systems in Sri Lanka, providing electricity to 3,200 households. Access to electricity has increased to 38%, from 30% in 2002. It aims at improving the quality of rural life, by utilising off-grid RE technologies, to provide electricity in remote areas, and promote private sector power generation from RE resources for the main grid. The key components of the project are:1) grid-connected RE power generation by enabling, on a large scale, refinancing support for mini-hydro projects, and extending support to two other commercially available RE sources, wind and biomass;2) solar PV investments, by integrating refinance, grants, and technical assistance (TA) support for the existing middle-range solar home system market, and expanding to smaller systems accessible to the poor, and community applications for health clinics, schools, and public services;3) independent grid systems, which will support the commercialisation of village hydropower, and other community-based independent grid systems, through refinancing, and grant support;4) TA and credit support to private sector development in EE services, and demand side management measures, including the integration of such programs into sector reforms;5) cross-sectoral energy applications, i.e., the provision of credit support to rural enterprises, TA to service institutions for energy development, and co-financing support for investments in selected areas; and,6) TA (in addition to the component-specific assistance) for project administration, sub-project promotion, technology and capacity building, and monitoring and evaluation.Clean Energy and Access Improvement Project (formerly the Sustainable Power Sector Development Project) Supported by the Asian Development Bank (ADB), this project aims to increase transmission and distribution capacity and affordable and reliable power supply by utilising clean energy resources. Its main outcomes are:(i) enhanced transmission grid reliability to avoid system collapse and reduce losses; and(ii) the removal of grid constraints to facilitate the use of 200MW capacity from small hydropower plants and future clean energy projects.