Infrastructure & PPPs in Bangladesh and Sri Lanka - Q3 2026 Update
BANGLADESH and SRI LANKA are advancing clean energy, transport, digital infrastructure, and PPP projects to strengthen energy security, regional connectivity, and sustainable economic growth. BANGLADESH is progressing key connectivity and industrial projects, including the USD 3.6 Bn rail network expansion, the USD 4.5 Bn Dhaka-Chattogram Expressway financing, the USD 550 Mn Laldia green port PPP, and a USD 2 Bn AI data center proposal alongside a 20% clean energy target by 2030. SRI LANKA is expanding its transport corridors with 132 km of expressway additions, modernizing the Port of Colombo with USD 40 Mn in green financing, and deploying a 1.2 GW Battery Energy Storage System (BESS) alongside the USD 291 Mn Sahasdhanavi 350 MW combined cycle power plant.
Read more about key developments in Infrastructure and PPPs in these countries in our Q3 2026 insight.
BANGLADESH
SAUDI ARABIA AND BANGLADESH ADVANCE TRANSPORT AND LOGISTICS INVESTMENT COOPERATION
Saudi Arabia has expressed a strong interest in expanding its investment footprint in Bangladesh, targeting the transport and logistics sectors with a primary focus on maritime development. The proposal aims to leverage Bangladesh’s ongoing privatization efforts and improved business environment to align with Saudi Arabia's strategic vision of becoming a global logistics hub.
The bilateral partnership seeks to open new opportunities for Saudi enterprises in Bangladesh while creating avenues for Bangladeshi businesses to expand into the Saudi market. Key areas identified for future cooperation include supply chain infrastructure, cold storage facilities, port developments, and financial services.
Additionally, both nations are discussing ways to enhance existing ventures, such as modernizing the operations of the Red Sea Gateway Terminal. By introducing advanced technologies and refining operational efficiency, both sides aim to build on current momentum and advance mutually beneficial economic projects. Project development and corporate discussions are ongoing in Q3-2026 to facilitate formal capital commitments, equity structuring, and operational agreements. The collaboration reinforces long-term economic connectivity, supply chain resilience, and maritime trade efficiency across both regions through public-private cooperation and targeted infrastructure expansion.
BANGLADESH STRENGTHENS COOPERATION FOR URBAN MASS TRANSIT INFRASTRUCTURE UPGRADES
Bangladesh and Japan have agreed to deepen their bilateral cooperation in infrastructure development, public transport system modernization, and mass transit expansion, including metro rail services. Japan reaffirmed its commitment to supporting Bangladesh's ongoing infrastructure projects as a key development partner.
The collaboration will focus on utilizing Japan’s technological expertise and advanced transit experience to support Bangladesh's rapid urbanization and economic growth. Both nations aim to establish an integrated, modern, safe, and environmentally sustainable transport system to meet long-term public needs.
Future efforts will focus on enhancing cooperation across multiple key sectors, including road transport, railway connectivity, and metro rail networks. This partnership aims to strengthen mutual ties while building modern transport infrastructure aligned with Bangladesh's long-term development goals.
BANGLADESH ANNOUNCES USD 3.6 BN NATIONAL RAIL NETWORK EXPANSION PROJECT
The Ministry of Railways in Bangladesh has announced a comprehensive long-term infrastructure plan to integrate all 64 districts into the national railway network. The initiative entails a combination of greenfield railway track construction, route extensions, and supporting rolling stock procurement. Presently, 48 districts maintain active rail connections, while 16 districts remain unconnected.
The expansion will proceed in two structured phases. Phase 1 prioritizes 10 rail-deprived districts, including Sherpur, Satkhira, Barishal, Barguna, Patuakhali, and Lakshmipur, where feasibility studies are under way. Phase 2 will extend lines to six remaining districts, including Rangamati, Bandarban, and Manikganj. Key sub-projects include the advanced Navaron–Satkhira route, the extension of the Madhukhali–Magura line, a route connecting Noakhali to Lakshmipur, and a rail link from Sherpur to the Nakugaon land port. Furthermore, preliminary work has commenced on a 205 Km corridor linking Bhanga to Kuakata via Barishal, valued at BDT 440 Bn (USD 3.6 Bn).
Bangladesh Railway currently operates over 400 passenger and freight trains daily, serving around 100 million passengers and moving 10 million tonnes of goods every year. Transport capacity is projected to rise significantly as new routes open. To support this growth, authorities are reviewing the 2016–2045 Railway Master Plan and preparing an integrated strategy to acquire new locomotives and coaches alongside ongoing track construction.
BANGLADESH COMMISSIONS USD 87.71 MN SIRAJGANJ SOLAR PARK PPP PROJECT
The Bangladesh-China Renewable Energy Company Limited has commissioned a greenfield utility-scale solar photovoltaic facility along the western bank of the Jamuna River in the Sirajganj district of Bangladesh. Built on 214 acres of leased riverine floodplains, the project features an installed capacity of 75MW on the AC side and supplies 68MW directly to the national power grid. The plant incorporates 156,576 monocrystalline bifacial photovoltaic modules, 72 inverters, and a 10.38 Km 132kV double-circuit transmission line.
The total project investment is USD 87.71 Mn. The facility is structured as a Public Private Partnership (PPP) under an Independent Power Producer (IPP) framework via a 50:50 joint venture between state-owned North-West Power Generation Company Limited and China National Machinery Import & Export Corporation. Offtake is secured through a 20-year Power Purchase Agreement signed with the Bangladesh Power Development Board at a fixed tariff of USD 0.102 per kWh.
Over its initial operational phase, the solar park produced over 213,000 MWh of clean electricity, avoiding approximately 142,942 tonnes of carbon dioxide emissions. The facility represents a critical step in Bangladesh's strategic goal to achieve 10,000MW in total solar capacity by 2030, reducing reliance on imported fossil fuels. Additionally, the infrastructure demonstrates innovative dual land use by integrating agrivoltaics, enabling seasonal crop cultivation and livestock grazing beneath elevated panel arrays during dry periods.
BANGLADESH APPROVES USD 1.14 BN INFRASTRUCTURE AND DEVELOPMENT PACKAGE
In July 2026, the Executive Committee of the National Economic Council (ECNEC) approved eight major development projects with a combined investment of BDT 140.41 Bn (USD 1.14 Bn). The infrastructure portfolio encompasses three greenfield initiatives and five project revisions spanning transport, energy security, power distribution, climate resilience, rural development, and healthcare sectors.
Financing for the package includes BDT 104.94 Bn (USD 852 Mn) allocated directly from government revenues, with the remaining BDT 35.50 Bn (USD 288 Mn) sourced through external foreign loans. Key transport and energy infrastructure components include the construction of the Dhaka-Ashulia Elevated Expressway under the Ministry of Road Transport and Bridges, the modernizing of the Sylhet Division Power Distribution System under the Ministry of Power, Energy and Mineral Resources, and the drilling of new gas exploration wells.
Regional and social infrastructure programs feature the Greater Dinajpur Integrated Development Project targeting the Dinajpur, Thakurgaon, and Panchagarh districts, the Universal Social Infrastructure Development-2 Project, and the Rural Road Maintenance and Employment Project under the Ministry of Local Government, Rural Development and Cooperatives. Additional social components include the upgrading of disaster shelters managed by the Ministry of Disaster Management and Relief, alongside the expansion of kidney dialysis capacity across medical colleges and district hospitals. The development package aims to strengthen national utility capacity, enhance disaster preparedness, and bolster regional connectivity.
UK FIRM PROPOSES USD 2 BN AI DATA CENTRE INFRASTRUCTURE PROJECT IN BANGLADESH
A United Kingdom-based company, ADIC, has proposed a USD 2 Bn foreign direct investment to establish Bangladesh's first frontier AI data centre and sovereign compute campus. The proposed project aims to be located in Kaliakair or the Sirajganj Economic Zone, creating roughly 10,000 direct jobs, over 50,000 indirect employment opportunities, and benefiting around 60,000 families. Discussions regarding AI data centre development are also ongoing with representatives from Japan and South Korea, though formal proposals from those nations have not yet been submitted.
The project is structured across three development phases over five years. The initial 24-month phase involves building a 30 to 50-megawatt facility for high-performance AI computing, followed by expanding capacity up to 200 megawatts to serve as a South Asian regional hub, and ultimately introducing quantum-ready infrastructure. Key objectives of the facility include establishing local data sovereignty under national legal frameworks, reducing foreign currency outflow, enabling high-performance research computing, and supporting the creation of a Bengali-language large language model.
To ensure continuous operations, the developer has proposed a 100-megawatt captive power plant featuring renewable integration alongside requests for high-capacity utilities, submarine cable connectivity, and tax or regulatory support. Industry experts and stakeholders view the technological push positively for regional competitiveness but highlight the need to evaluate existing facilities first. Environmental specialists further warn that liquid-cooling systems and massive power demands could strain local water and energy supplies unless sustainable closed-loop technologies and renewable energy sources are strictly implemented.
BANGLADESH GOVT SEEKS USD 4.5 BN VIA FOREIGN FUNDS
The Bangladesh government is seeking nearly USD 4.5 Bn in foreign financing to construct the proposed 232.76 Km Dhaka-Chattogram Expressway. Estimated to cost a total of BDT 710 Bn (USD 5.8 Bn), the project aims to secure BDT 550 Bn (USD 4.5 Bn) through external borrowing while the government funds the remaining BDT 160 Bn (USD 1.3 Bn). Development partners like the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) are being approached to explore co-financing, public-private partnerships, and concessional loans.
Designed as an access-controlled, toll-based facility, the expressway will run largely parallel to the existing four-lane national highway connecting Daudkandi to Chattogram. The planned route incorporates elevated stretches, multi-lane urban flyovers, and isolated carriageways to streamline travel between the capital and the nation's principal seaport. By replacing the currently congested route—which handles over 80% of Bangladesh’s import-export cargo—the infrastructure aims to reduce logistics costs and boost regional economic trade.
BANGLADESH MODERNIZES INFRASTRUCTURE WITH USD 550 MN LALDIA GREEN PORT
The APM Terminals Laldia project in Chattogram has officially broken ground, marking one of Bangladesh’s largest Public-Private Partnership investments to date. Developed through a USD 550 Mn landmark agreement between the governments of Bangladesh and Denmark, the project partners APM Terminals with the Chittagong Port Authority and QNS Container Services. The infrastructure will be fully built and operated by private partners while remaining under Bangladeshi state ownership.
Scheduled to open in 2030, the terminal will boost annual handling capacity by over 800,000 TEU to alleviate port congestion. Its deeper draft and extended quay will allow the Port of Chattogram to accommodate ships up to 6,000 TEU, more than double its current vessel size capacity. This upgrade aims to streamline turnaround times, lower logistics costs, and directly support key export sectors like textiles and manufacturing.
Designed as an energy-efficient facility, the terminal will feature electrified handling equipment, solar power, and shore-power-ready systems to minimize environmental impact. These green initiatives align with global supply chain standards, aiding local exporters in meeting strict international environmental requirements. Additionally, the project will generate over 1,000 construction jobs and 500 operational roles, backed by dedicated local training programs.
JAPANESE FIRM PROPOSES USD 3.4 BN BRIDGE PROJECTS UNDER PPP MODEL
Japanese construction firm Miyagawa Kensetsu Construction Ltd has expressed interest in building two major bridge projects in Bangladesh—the Bhola-Barishal and Shariatpur-Chandpur bridges—under a public-private partnership (PPP) model valued at USD 3.4 Bn. Both projects were formally added to the Bangladesh-Japan Joint PPP Platform during a recent bilateral meeting in Dhaka. The government plans to bear land acquisition costs and targets completing both bridges by 2033 following transaction advice, feasibility studies, and formal bidding.
The proposed 10.86 Km Bhola-Barishal Bridge, estimated at USD 1.79 Bn, is set to become the longest bridge in Bangladesh, connecting Bhola island to the mainland. A 2024 feasibility study indicates that the structure will boost GDP by 0.86% over 30 years by stimulating investment and local employment. Beyond upgrading regional transport networks, the bridge will also enable the direct transport of natural gas from Bhola into the national power grid.
The second project, the 8 Km Shariatpur-Chandpur Bridge over the Meghna River, carries an estimated cost of USD 1.64 Bn and is slated for completion by 2032. Spanning between Harina terminal and Shakhipur, it will link 21 southwestern districts with 11 southeastern districts, replacing slow ferry services and cutting the travel distance between Khulna and Chattogram by 90 Km. Additionally, Japan has shown interest in a third project—the Bhola-Lakshmipur Bridge—as well as a waste-to-energy initiative and railway bridge modernizations.
PVT ENTITY PROPOSES 6,000 MICRO-ECONOMIC ZONES ACROSS BANGLADESH
Architecture Research and Development (ARD) has proposed establishing 6,000 micro-economic zones across Bangladesh under a public-private partnership model. The initiative aims to create an interdependent local economic system by integrating production, processing, housing, and low-carbon energy infrastructure across the country.
Each zone is designed to feature cold storage, agro-processing facilities, workspaces, training centres, and small-scale renewable energy systems such as windmills and mini-hydropower units. This setup will support local entrepreneurs while reducing import reliance and strengthening food security and climate resilience.
The plan targets involving around 600,000 direct entrepreneurs who will own shares in the development, with preliminary surveys indicating space for an average of 270 entrepreneurs per zone. The master plan was formulated through field observations focused on addressing the housing, employment, and livelihood needs of marginalized communities under a unified framework.
BANGLADESH PLANS 800 ELECTRIC BUSES IN USD 370 MN CHINA-SOUTH KOREA PUSH
Bangladesh is preparing one of its largest public transport expansions by acquiring 800 battery-electric buses through two separate proposals financed by South Korea and China. Totaling approx. USD 370 Mn, the state-owned Bangladesh Road Transport Corporation (BRTC) aims to complete the project by June 2029 to deploy the zero-emission fleet across major cities, including Dhaka and Chattogram.
The South Korean package is valued at USD 219 Mn and includes 300 buses priced at around USD 372,000 each, alongside substantial infrastructure like 25 charging stations, workshops, warehouses, washing systems, and technical training. In contrast, the Chinese package is estimated at USD 151 Mn for 500 buses at approximately USD 199,000 per unit—nearly 47% cheaper per vehicle—and includes 25 charging stations and major maintenance facilities.
While the South Korean initiative has secured preliminary approval for Economic Development Cooperation Fund financing, the Chinese proposal remains under further ministry review. These acquisitions represent a key step toward a broader government target of operating 1,400 electric buses, supported by ongoing infrastructure standardization and feasibility studies to ensure long-term fleet maintenance and charging readiness.
BANGLADESH LAUNCHES USD 123 MN ROOFTOP SOLAR FUND
Bangladesh has established a USD 123 Mn fund to accelerate the installation of rooftop solar and other renewable energy systems across the country. Financed by reallocating money from the current fiscal year's development budget, the initiative aims to combat ongoing power shortages. Additionally, the government is seeking further international assistance from global development partners, including the Asian Development Bank, the Japan International Cooperation Agency and the World Bank to deploy 4 GW of rooftop solar capacity before next summer.
The newly formed fund will provide concessional loans on favorable, affordable terms for residential, institutional, and industrial projects. Distributed through national financial entities like IDCOL, BIFFL, and PKSF, the funding covers new, expanded, and upgraded installations. Eligible applications include net-metered rooftop PV systems, solar home systems, industrial solar arrays, and solar irrigation pumps.
This financial push supports Bangladesh’s broader Renewable Energy Development Policy 2026–2030, which targets a 20% share of renewables in the national electricity generation mix by 2030. Expanding rooftop solar is key to meeting this goal, as the country currently has 1,852 MW of total installed renewable energy capacity, with solar accounting for 1,473 MW.
ADB BACKS USD 200 MN DHAKA POWER INFRASTRUCTURE UPGRADE
The Asian Development Bank (ADB) has approved a USD 200 Mn loan to upgrade electricity distribution infrastructure in fast-growing communities around Dhaka, Bangladesh. The Power Distribution Network Enhancement Project will support the Bangladesh Rural Electrification Board (BREB) across 13 electric cooperatives to address overloaded substations, aging equipment, and power losses. Additional funding includes USD 107.95 Mn from the Government of Bangladesh, USD 141.39 Mn from BREB, and a USD 1 Mn grant from the Republic of Korea.
The project will add 1,150 megavolt-amperes of transformer capacity across 52 new substations while expanding 12 existing ones by 115 megavolt-amperes. Over 2,600 kilometers of overhead and underground lines with insulated conductors will be installed, alongside switching stations and 900 fault locators to speed up service restoration. These upgrades aim to provide a more reliable power supply for surrounding households and industries following the country's full electrification in 2022.
A total of USD 146.52 Mn is dedicated to resilience financing, incorporating hazard-resilient designs and eco-friendly gas-insulated switchgear to protect against natural disasters. Lowering distribution inefficiencies is expected to reduce annual greenhouse gas emissions by approx. 203,751 tonnes of carbon dioxide equivalent. Furthermore, the initiative will fund technical training for staff in cybersecurity and system management, alongside programs to expand opportunities for women in the power sector.
GOVT APPROVES USD 304 MN PROCUREMENT PROPOSALS FOR ROAD, INFRASTRUCTURE PROJECTS
The Cabinet Committee on Government Purchase (CCGP) has sanctioned two major infrastructure procurement proposals with a total value of around BDT 37.48 Bn (USD 304 Mn). These approvals focus on improving regional communication networks and expanding industrial transport capacities. The dual decision aims to address both immediate disaster recovery needs and long-term economic development initiatives.
The first approved project involves allocating BDT 1.18 Bn (USD 9.5 Mn) toward urgent restoration work across damaged transportation networks. The primary objective is the emergency repair and reconstruction of essential roads, bridges, and culverts in the Sunamganj and Habiganj regions. This infrastructure suffered severe damage during the heavy flooding that struck the area in 2022.
The second and larger procurement proposal grants BDT 36.3 Bn (USD 295 Mn) crore toward major foundational infrastructure. Managed under Invest Bangladesh, the funds will support the development of the Chinese Economic and Industrial Zone. China Road and Bridge Corporation was selected as the primary contractor to execute this extensive package
BANGLADESH TARGETS 20% RENEWABLE POWER BY 2030
Bangladesh has set a target to generate at least 20% of its electricity from renewable sources by 2030 and 30% by 2040 to reduce dependence on imported fuel and boost energy security. Under the National Renewable Energy Development Strategy 2026-2030, the country aims to produce 5,500 MW from rooftop solar systems, 4,500 MW from ground-mounted solar projects, and up to 550 MW from wind, waste-to-energy, hydropower, and floating solar systems.
To encourage adoption, conditional exemptions from customs duty, regulatory duty, supplementary duty, advance tax, and advance income tax have been provided on solar panels, inverters, batteries, and related structures. Additionally, the government has set a maximum generation cost of BDT 8 per unit (USD 0.07) for battery-backed rooftop solar systems and fixed a grid purchase tariff of BDT 10.50 per unit (USD 0.09) for surplus power, offering a 20% profit margin and an 11.25% incentive premium.
To streamline the transition, a comprehensive series of policies has been introduced, including frameworks for public-private renewable projects on government land, private sector participation, and waste-to-energy business models. These measures are supported by guidelines covering rooftop solar installations, net metering, onshore wind development, and carbon-credit processes.
BANGLADESH PLANS CHINA-FUNDED HIGHWAY MASTERPLAN
The Roads and Highways Department (RHD) of Bangladesh is preparing a new masterplan for the country's trunk highway network, supported by a BDT 123.5 Mn (USD 1 Mn) grant from the Chinese government. The initiative aims to meet rising transport demand and drive future economic growth by establishing a data-driven framework for key transportation corridors. Expected to be completed by October next year, the proposed proposal has been sent to the Planning Commission for final approval.
The core focus of the project is mapping out a national high-speed expressway network to connect major economic centres, industrial zones, ports, and cities. Unlike previous road initiatives, this plan treats major river-crossing bridges as integrated components of the highway system rather than isolated projects. By prioritising key infrastructure links, the strategy aims to streamline transit across critical regional and national routes.
The masterplan will establish a phased implementation framework, categorising road and bridge development into short, medium, and long-term goals to optimise investment efficiency. By addressing historical issues such as fragmented planning, lack of unified data, and inconsistent technical standards, the project seeks to reduce logistics costs and boost trade. Ultimately, this enhanced connectivity is expected to support Bangladesh's graduation from Least Developed Country status and advance its Sustainable Development Goals.
BANGLADESH PROPOSES USD 1.55 BN MAJOR TOURISM OVERHAUL
The Bangladesh Parjatan Corporation (BPC) has proposed 60 tourism development projects across the country, estimated at BDT 190.9 Bn (USD 1,55 Bn), to upgrade infrastructure and create new tourist facilities. Submitted to the Ministry of Civil Aviation and Tourism for planning approval, the proposal aims to enhance the competitiveness of the tourism sector and boost its economic contribution. Financing for the projects will be diversified across government funds, public-private partnerships, private investments, and potential foreign capital.
The largest regional allocation of BDT 59.8 Bn (USD 484 Mn) is designated for nine projects in Chattogram and Cox's Bazar, including tourism complexes, diversified attractions, and night-time entertainment. Coastal and island regions are slated for BDT 35.4 Bn (USD 287 Mn) in investment to add accommodation and infrastructure, while Sylhet is allocated Tk3,460 crore across 12 projects to build international-standard tourism facilities. Additionally, Dhaka and its surrounding areas are set to receive BDT 29 Bn (USD 235 Mn) for multipurpose complexes, cable cars, handicraft centers, and heritage attractions.
The remaining allocation covers several other key regions, including BDT 17.2 Bn (USD 139 Mn) for four projects in the Khulna-Sundarbans area to expand eco-tourism facilities and construct five-star hotels. Seven projects worth BDT 15.1 Bn (USD 122 Mn) are designated for Rajshahi and northern districts to develop existing and potential spots. Meanwhile, in the Chattogram Hill Tracts, plans focus on expanding facilities and redeveloping attractions like suspension bridges in Kaptai, Bandarban, and Rangamati.
SRILANKA
INDIA’S DEVELOPMENT ASSISTANCE TO SRI LANKA SURPASSES USD 7.5 BN
India's developmental assistance to Sri Lanka has surpassed USD 7.5 Bn, encompassing projects across all 25 districts of the island nation. This aid includes over USD 850 Mn provided directly as grant funding to support essential public sectors. The funded initiatives target key areas such as housing, healthcare, education, energy, railways, and overall livelihood generation. By focusing on capacity building and vulnerable communities, these efforts aim to drive long-term economic growth while deepening bilateral ties.
Bilateral collaboration continues to strengthen through regional programs and critical infrastructure upgrades. Regional partnerships remain active through capacity-building programs under initiatives like the Colombo Plan as it marks its 75th anniversary. Additionally, dedicated grant funding of USD 1.7 Mn is being directed toward relocating and equipping medical facilities in high-risk zones, ensuring uninterrupted access to emergency healthcare services through modern equipment installation.
The broader development strategy also addresses major disaster recovery and rehabilitation needs, including a dedicated USD 450 Mn assistance package following cyclone damage. All projects are aligned with priority areas defined by local authorities to ensure transparent execution and direct community benefits. By prioritizing the use of local materials and labor, these developmental programs provide an immediate boost to Sri Lanka's domestic economy.
SRI LANKA PREPARES REGULATORY FRAMEWORK FOR PASSENGER DRONE TRANSPORTATION SYSTEM
Sri Lanka is advancing plans to integrate Electric Vertical Take-off and Landing (eVTOL) passenger drones into its national transport architecture as part of an Advanced Air Mobility (AAM) initiative. High-level technical discussions led by the Civil Aviation Authority of Sri Lanka brought together civil aviation authorities, state aviation stakeholders, defense, tourism, and investment agencies to establish operational and safety framework requirements for urban air mobility.
The initiative focuses on establishing a dedicated eVTOL Regulatory Sandbox environment. This framework will oversee research, development, demonstrations, and supervised test flights, serving as a structured roadmap toward future commercial passenger drone operations.
Key technical sessions covered critical aspects necessary for integrating passenger drones into the country's existing airspace system, including airspace management, certification, licensing, infrastructure readiness, inter-agency coordination, safety oversight, and security protocols. National aviation authorities reaffirmed their commitment to supporting air transport innovations while strictly adhering to international aviation safety standards and International Civil Aviation Organization (ICAO) Standards and Recommended Practices.
SRI LANKA OPENS BIDS FOR KURUNEGALA-DAMBULLA CENTRAL EXPRESSWAY EXPANSION
The cabinet of Sri Lanka has approved the procurement process to initiate Phase 1 of the fourth stage of the Central Expressway Project. This section comprises a 38.5 Km stretch running between Kurunegala and Galewela, spanning specifically from 78 Km to 116 Km. This road expansion aims to upgrade key transport corridors and improve regional connectivity and logistics across the central island.
The execution strategy divides the fourth phase into two distinct stages to optimize project implementation and financial management. Funding for this 38.5 Km segment will be fully provided by the Government of Sri Lanka. Under the approved framework, the procurement structure prioritizes domestic construction companies to carry out the physical works, supporting capacity building within the local construction industry.
The project procurement phase is scheduled to begin in Q3-2026 following cabinet approval in July 2026. Bidding processes will open strictly to eligible local contractors to execute the multi-Km expansion. Once awarded, domestic firms will handle construction under government oversight. The initiative forms part of Sri Lanka's broader effort to modernize national transport infrastructure and accelerate economic movement along key regional trade and transit routes.
SRI LANKA APPROVES USD 40 MN COLOMBO PORT MODERNIZATION PROJECT
The Port of Colombo will receive up to USD 40 Mn in funding to support modernization and decarbonization initiatives at its South Asia Gateway Terminal (SAGT). The upgrade focuses on enhancing operational resilience, sustainability, and transhipment capacity to manage growing global trade demands.
Located in Sri Lanka, the Port of Colombo serves as a key maritime trading hub in South Asia. SAGT represents the nation’s first Public Private Partnership (PPP) container facility. Modernization activities funded by this financing package are scheduled for execution during Q3-2026.
The total investment package amounts to USD 40 Mn. The package comprises a sustainability-linked loan of up to USD 20 Mn from the International Finance Corporation (IFC)—which includes USD 8.57 Mn mobilized via its Managed Co-Lending Portfolio Programme—alongside a parallel green loan of up to USD 20 Mn from HSBC.
The funding will support the procurement of advanced twin-lift ship-to-shore cranes designed to lower energy consumption and enhance quay-side productivity by at least 11%. This brownfield project will increase overall terminal capacity for domestic and transhipment container traffic, reduce operational carbon emissions, and generate new employment opportunities within the regional logistics sector.
SRI LANKA ANNOUNCES USD 1.2 GW BATTERY ENERGY STORAGE SYSTEM GRID PROJECT
Sri Lanka plans to deploy a 1.2 GW (1,200 MW) Battery Energy Storage System over a two-year period ending in 2028 to address high electricity demand during peak night-time hours. The government initiative aims to stabilize the national grid and accelerate the country's transition toward renewable energy. Under the planned implementation schedule, an initial capacity of 560 MW will be integrated into the national power grid by Q4-2027, followed by the remaining capacity to reach 1.2 GW by mid-2028.
The grid expansion follows a rapid growth in renewable power generation across the country. Installed rooftop solar capacity nearly doubled from 867 MW in 2024 to over 1.67 GW in 2025. While daylight hours provide significant solar power generation, maintaining grid stability requires adequate system inertia and balancing capacity. The government is also deploying complementary stability measures, including support from existing hydropower facilities.
The Battery Energy Storage System is designed to capture excess renewable power generated during off-peak day hours and discharge it during peak demand periods. Once fully operational, the 1.2 GW system will supply stored renewable power back to the national grid for up to four hours daily during peak consumption windows.
SRI LANKA CABINET APPROVES USD 3.63 MN FLEET UPGRADE FOR EXPRESSWAY NETWORK
The Cabinet of Ministers has approved a proposal to allocate LKR 1.2 Bn (USD 3.63 Mn) from expressway earnings to purchase new vehicles and equipment for Sri Lanka’s highway network. The funding will cover 21 different categories of machinery, including ambulances, fire trucks, double-cab pickups, aerial platform trucks, telescopic boom trucks, and specialized cleaning vehicles.
This procurement aims to replace worn-out equipment on the current 312 Km network while preparing for upcoming expansions planned through 2028. The new additions will specifically support operations on new routes, including the Port Access Expressway, Section 1 of the Central Expressway, and Section 111 from Pothuhera to Galagedara.
SRI LANKA TO ESTABLISH USD 1.21 MN RENEWABLE ENERGY TRAINING CENTRE
Sri Lanka is constructing a new renewable energy training centre valued at LKR 398 Mn (USD 1.21 Mn) under the Ceylon German Technical Training Institute (CGTTI). Located on a 3.11-hectare land parcel in the Mayurapura Division of the Walawa Zone. The training facility is expected to function as a CGTTI-affiliated branch and would be located near the Kiribbanwewa Floating Solar Power Plant and the SLSEA’s Hambantota Training Centre, providing students with opportunities for practical training.
The project follows a Memorandum of Understanding signed on February 10, 2025, between the CGTTI and the Sri Lanka Sustainable Energy Authority (SLSEA) to address the growing demand for skilled personnel in the renewable energy sector. The project received official approval to proceed using domestic government funding.
CABINET APPROVES OVER USD 3.03 MN CAPITAL FOR LANKA METRO EXPANSION
The Cabinet has approved the provision of more than LKR 1 Bn (USD 3.03 Mn) in equity capital to Lanka Metro Transit (Pvt) Ltd to expand its public transport operations and develop supporting infrastructure. Established on October 3, 2025, as a subsidiary of the Sri Lanka Transport Board, the company aims to modernize public transport across the country. Following a successful pilot program in Colombo utilizing 10 low-floor buses imported under the Clean Sri Lanka initiative, the service demonstrated both commercial viability and strong public acceptance.
The transit provider plans to deploy 112 additional low-floor buses starting in September. The government has allocated LKR 800 Mn (USD 2.42 Mn) in equity capital for 2026 for infrastructure development during 2026. An additional LKR 267.5 Mn (USD 810,000) will be provided in 2027 to cover the company's ongoing operational needs. This development effort includes upgrading internal roads and bus parking facilities, as well as constructing a fully equipped central workshop alongside modern bus depots in Kalangama, Kadawatha, Ratmalana, and Homagama.
SRI LANKA TO ADD 132 KM TO EXPRESSWAY NETWORK BY 2030
Sri Lanka is expanding its national expressway network by 132 Km through four major infrastructure projects set for completion by 2030. Ongoing construction includes two key segments of the Central Expressway including a 37 Km stretch from Kadawatha to Mirigama and a 33 Km section connecting Pothuhera to Galagedara.
The first phase of the Kurunegala–Dambulla Expressway—is scheduled to commence before the end of 2026, a 38 Km phase of the Kurunegala–Dambulla Expressway estimated at LKR 233 Bn (USD 705 Mn). This section will be divided into 12 contract packages awarded to domestic construction companies through competitive bidding, while construction on the 24 Km Ruwanpura Expressway is also set to begin within the year.
For the first time, these major transport initiatives will be financed entirely through Sri Lankan domestic funds. The government is executing these projects in strict alignment with its national strategic development framework to ensure sustainable infrastructure growth.
SRI LANKA SECURES USD 10 MN INVESTMENT TO EXPAND DIGITAL INFRASTRUCTURE
EDOTCO Services Lanka Ltd. has signed a USD 10 Mn investment agreement with the Board of Investment of Sri Lanka to upgrade and scale the country’s shared digital infrastructure. Over the next 30 months, the initiative will focus on enhancing national connectivity and power infrastructure to support Sri Lanka's growing digital economy, public services, and digital identity framework. The expansion plan includes deploying 130 macro towers, 300 multi-purpose smart lamp poles, and 650 energy sites across the nation. These additions are designed to streamline network deployment, broaden nationwide coverage, and facilitate infrastructure sharing among various mobile network operators.
As Sri Lanka’s first licensed Infrastructure Provider, the company is expanding beyond smart lamp poles and energy solutions to build a broader range of shared assets. This infrastructure development aligns with the national Digital Economy Blueprint to enable future technologies, strengthen economic growth, and promote digital inclusion. Since starting operations in July 2016, the organization has invested USD 30 Mn in local telecommunications infrastructure.
INDIA AND SRI LANKA NEAR USD 61 MN KANKESANTHURAI PORT DEAL
India and Sri Lanka are nearing the finalisation of a landmark USD 61 Mn agreement to redevelop the Kankesanthurai port located in Sri Lanka’s Northern Province. Situated near Jaffna, the port holds strategic and commercial importance due to its proximity to the Indian coast. The initiative reflects India’s expanding role as a major infrastructure partner for Sri Lanka, providing crucial investment to help stabilise the island nation’s economy.
The rehabilitation of the Kankesanthurai port is widely regarded as a key priority for post-war economic development in the region. Once a vital transit hub for passenger and cargo traffic between the two nations, the port fell into disuse during decades of civil conflict. Upgrading this infrastructure aims to revive long-standing regional maritime connections and drive growth in historically underserved northern communities.
A fully operational port is expected to enhance trade flows across the Palk Strait and stimulate tourism through revived passenger ferry services. The project is set to create local employment opportunities and bolster Sri Lanka’s broader maritime network. While final confirmation and official timelines from Colombo remain pending, ongoing diplomatic momentum suggests a formal agreement will be signed soon.
SRI LANKA LAUNCHES FIRST PROJECT IN 300MW SOLAR POWER PROGRAMME
Sri Lanka has launched a new initiative to expand its renewable energy capacity by adding 300MW of solar power to the national electricity grid. As part of this program, a 3MW ground-mounted solar facility was recently inaugurated in Veyangoda. The project aims to reduce the country’s reliance on imported fossil fuels while encouraging private-sector investment in clean energy development.
The new Veyangoda installation features 640-watt bifacial solar panels, which generate electricity by capturing sunlight on both sides. Estimates indicate the facility will supply around 6.35 million kilowatt-hours of power annually to the grid. Additionally, the project is expected to offset approx. 4,340 tonnes of carbon dioxide emissions each year.
This expansion aligns with national sustainability goals, including sourcing 70% of electricity from renewables by 2030 and attaining carbon neutrality by 2040. Concurrent upgrades to the national power grid are being implemented to seamlessly incorporate the growing volume of renewable energy. These infrastructure improvements will ensure grid stability as additional solar facilities come online across the country.
SAHASDHANAVI 350 MW POWER PROJECT ADVANCES IN KERAWALAPITIYA
The Board of Investment of Sri Lanka has registered an agreement with Sahasdhanavi Limited to develop a 350 MW combined cycle power plant in the Kerawalapitiya Industrial Zone. The USD 291.19 Mn facility will be built under a Build-Own-Operate-Transfer (BOOT) basis, comprising USD 90 Mn in share capital, USD 196.19 Mn loans, USD 5 Mn from additional sources. Once fully operational, the project is anticipated to create 1,147 local jobs across multiple sectors.
The development will unfold in two distinct phases to manage early fuel availability effectively. Phase I features a gas turbine producing 243 MW on liquefied natural gas (LNG) or 213 MW on diesel, while Phase II adds a steam turbine generating 107 MW on LNG or 105 MW on diesel. Although operations will begin using diesel, the setup is built to transition smoothly to Regasified Liquefied Natural Gas (RLNG) as national supply infrastructure matures. This adaptability ensures immediate energy delivery while preparing for cleaner, lower-emission operations in the future.
This initiative cements Kerawalapitiya as a key national power center, boosting regional capacity to around 1,000 MW alongside existing facilities. Beyond power generation, the transition to RLNG will enhance overall grid stability and help meet expanding national energy demands. The project is also expected to stimulate broader economic activity and build technical expertise across local engineering, construction, manufacturing, and logistics industries.
WINDFORCE SECURES BIDS FOR 28MW BATTERY STORAGE PROJECTS
Six project companies under renewable energy firm WindForce PLC have submitted winning bids to establish 28 MW / 144 MWh of battery energy storage systems in Sri Lanka. The project represents an estimated equity investment of approx. LKR 944 Mn (USD 2.86 Mn) for the company. While the formal award is pending, the company considers this development to be price-sensitive information vital to its operational growth and long-term financial outlook.
The bids were placed under a tender to set up 150 MW / 600 MWh of Battery Energy Storage Systems integrated with existing ground-mounted solar power plants. The projects will be built on a Build, Own, and Operate model for a 15-year period. The six participating units include Diya Janani (Pvt) Ltd, in which WindForce holds a 100% stake with a project capacity of 3.75 MW / 18.75 MWh; Kebitigollewa Solar Power (Pvt) Ltd, where it holds 88.50% (4.90 MW / 25.00 MWh); and Vydexa (Pvt) Ltd, in which it owns 76.13% (4.90 MW / 25.00 MWh).
SRI LANKA COMMISSIONS FIRST BESS FACILITY
Sri Lanka has commissioned its first grid-connected battery energy storage system (BESS) in Anuradhapura, marking a key step in strengthening the national power infrastructure and supporting renewable energy integration. Developed under the StoreX joint venture by WindForce and Vidullanka, the newly launched facility features a 10 MW / 40 MWh battery storage system paired with a 5 MW floating solar power plant. The solar unit is projected to supply approximately 9 GWh of renewable energy annually, bringing WindForce’s total renewable capacity to roughly 268 MW.
This initial installation represents the first of 13 planned BESS sites across the country that will expand further as additional systems are completed. Once fully operational, these upcoming installations, alongside an additional co-developed unit, will form a combined 130 MW / 520 MWh storage network. The overarching initiative aims to stabilize grid voltage, shift peak loads, and maximize solar absorption throughout the national grid.
UAE EYES SRI LANKA PORTS & LOGISTICS OPPORTUNITIES
Sri Lanka is seeking investment from UAE capital to expand and develop key infrastructure, notably within Port City Colombo and its special economic zone, as well as the deep-water harbour at Trincomalee Port. Following a total bilateral non-oil trade volume of USD 1.1 Bn in 2025, both nations are focusing on creating legal frameworks and investment protection treaties to further strengthen their ongoing economic partnership.
Beyond physical port infrastructure, Sri Lanka is actively pitching its agriculture, technology, and manufacturing sectors to foreign investors. A major proposed initiative involves UAE firms acquiring local agricultural land to produce food for direct export back to the Emirates, enhancing food security. Additionally, the strategy focuses on expanding IT capabilities and building domestic pharmaceutical production to reduce the country’s high dependence on overseas supplies.
To provide long-term foreign investment safeguards, legal protections are being highlighted alongside capital repatriation policies and anti-corruption measures. The tourism sector is also aiming for strategic growth by targeting more visitors from the Emirates, positioning the island as a destination for high-end events and international weddings while expanding overall commercial and trade delegations between the two countries.
PRESIDENT TO LAUNCH USD 21.6 MN HOSPITAL DEVELOPMENT PROJECTS
President Anura Kumara Dissanayake to lay foundation stones on September 16 for four hospital development projects totaling LKR 7.1 Bn (USD 21.6 Mn) across Anuradhapura, Trincomalee, Mannar, and Mullaittivu. Financed through Japanese loan assistance and Indian grant funding, these initiatives aim to significantly expand specialized healthcare across the Northern, North Central, and Eastern provinces.
Supported by Japan International Cooperation Agency (JICA) loans, an eight-storey cardiac care complex costing LKR 3.54 Bn (USD 10.70 Mn) will be constructed at Anuradhapura Teaching Hospital, alongside a similar eight-storey cardiac complex valued at LKR 2.40 Bn (USD 7.27 Mn) at Trincomalee District General Hospital. These facilities will feature intensive and coronary care units, catheterization labs, diagnostic equipment, libraries, and auditoriums to improve local cardiac treatment options.
Funded by LKR 1.20 Bn (USD 3.63 Mn) in Indian grant aid, the remaining two developments comprise a LKR 600 Mn (USD 1.82 Mn) emergency, accident, and critical care complex at Mannar District General Hospital, as well as a LKR 600 Mn (USD 1.82 Mn) four-storey ward complex at Mullaittivu District General Hospital designed to alleviate overcrowding and enhance overall patient care.
List of key transactions - Bangladesh and Sri Lanka Q3-2026
Source: YOG INFRA analysis
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