The International Finance Corporation (IFC) is proposing to extend up to $18 million in local-currency financing to WindForce PLC, marking a fresh deployment of blended capital into Sri Lanka’s power sector as the country continues to stabilise after a prolonged economic crisis.
The financing, structured at the holding-company level and supported by the IDA Private Sector Window Local Currency Facility, will fund WindForce’s equity contribution to a 100-MW solar project in Uva province, while also providing headroom for additional renewable energy investments, including potential battery energy storage systems (BESS) with capacity of up to 120 MW/480 MWh.
The use of local-currency funding—paired with a tenor of up to 10 years—highlights the role of development finance institutions in addressing one of the most persistent constraints in frontier infrastructure markets: the lack of long-duration, local-currency capital.
IFC’s involvement, including a cross-currency swap mechanism backed by concessional funding, effectively reduces foreign exchange risk while improving project bankability.
The blended finance component, estimated at roughly 16% of total project cost, underscores the level of risk still embedded in Sri Lanka’s infrastructure sector despite improving macroeconomic conditions.
For investors, this signals that while opportunities are reopening, projects continue to require credit enhancement and concessional layers to move forward.
Beyond capital deployment, IFC will also provide technical and environmental advisory support, including on grid resilience, engineering oversight, and operational standards—areas that remain underdeveloped in emerging renewable markets.
The project aligns with Sri Lanka’s target of sourcing 70% of its electricity from renewables by 2030, while reducing dependence on imported fossil fuels.
It also comes at a time when the country is seeking to rebuild investor confidence and crowd in private capital following its debt crisis.
For IFC, the investment reflects a broader countercyclical strategy—stepping in during periods of market dislocation to anchor early-stage recovery and signal viability to other investors.
For Sri Lanka, it offers a test case for whether blended finance can help restart a stalled infrastructure pipeline.
