Sri Lanka Cabinet Approves Resumption of Lower Malwathu Oya Hydropower Project with Increased Costs

Sri Lanka's cabinet has approved the resumption of the Lower Malwathu Oya multipurpose hydro power project, initially halted due to the COVID-19 pandemic and a currency crisis. The project, originally approved on July 19, 2019, had an estimated cost of 22.9 billion rupees, which has now been revised to 47.18 billion rupees as of December 2025, reflecting a 106.02% increase in rupee value from 2019 to 2025.

During this period, the rupee depreciated significantly against the US dollar, from 176 to 308. The project aims to enhance water supply for 24,450 acres of farmland, irrigate 2,000 acres of new land, and produce 4.28 GigaWatts of hydro power, along with providing 2 million cubic meters of drinking water.