Renting Space in Sri Lanka: Getting Power Capacity and Electricity Costs Into the Lease

Before you sign a lease in Sri Lanka, settle three things about electricity in writing: the premises' contract demand and supply category stated as numbers in the lease, who pays for and maintains the backup generator and its fuel, and a cost-sharing formula tied to the utility's official bill. Left unwritten, each one turns into an extra cost after handover.

Most people viewing a space ask one question — “is the power enough?” — accept the landlord's “yes”, and move on. Then the equipment arrives, the air conditioning runs at full load, and you either trip the breaker or find a demand charge you never budgeted for sitting on the monthly bill.

What follows runs in signing order, starting with how to turn “enough” into numbers.

When you view a space, how do you get a real number for available power?

“Enough” is not an answer. You want four numbers:

• The existing meter's supply category and voltage level (single-phase or three-phase, 400/230V or an 11 kV incoming line)
• The contract demand in kVA, as stated in the schedule to the supply agreement
• The premises' transformer capacity, and how much of it is already allocated to others
• Whether the premises has its own incoming supply or shares a bulk meter with other tenants

Ask the landlord for complete copies of the electricity bills for the last six months. A screenshot of a payment proves nothing; only the bill shows the category, the demand and the time-of-use consumption. Ask for the schedule to the supply agreement as well — CEB's standard service connection agreement records contract demand there, and that schedule is what determines which tariff band you fall into and whether a demand charge applies. Check it against the latest requirements published by CEB (https://www.ceb.lk).

There are two places this usually stalls. Older office buildings often run with very little transformer headroom, and the landlord genuinely cannot say how much is left. Or the premises is a sublease, and the original supply documents sit with the head landlord.

Why does the 42 kVA line decide your timeline and your cost?

The Ceylon Electricity Board (CEB) uses 42 kVA as the dividing line between supply arrangements. Demand of up to 42 kVA is handled as a retail supply. Above that you move into bulk supply, which must be approved by CEB's Commercial Engineer, and the in-premises wiring has to be certified by a licensed electrical engineer with an installation test report and electrical isolation certificate.

The two routes are not in the same league on delivery time: on CEB's published standard, retail supply takes around 10 working days and bulk supply around 40 working days, counted from settlement of the charges, with the latest CEB publication governing. Note that the 40 days covers only CEB's side of delivery — not design, equipment procurement, on-site construction or inspection.

Tariff structure differs too. Below are the industrial rates published by the Public Utilities Commission of Sri Lanka (PUCSL), as revised in June 2025:

Category	Applies to	Peak / Day / Off-peak (LKR/kWh)	Maximum demand charge	Monthly fixed charge (LKR)
I-1	400/230V, contract demand ≤ 42 kVA	20.50 / 11.00 / 6.85	—	300
I-2	400/230V, contract demand > 42 kVA	20.50 / 11.00 / 6.85	3,000 LKR/kVA/month	1,100
I-3	11 kV and above incoming supply	23.50 / 10.25 / 5.90	3,000 LKR/kVA/month	1,000

Peak runs 18:30–22:30 and off-peak 22:30–05:30. Offices and commercial users fall under a different category with different rates, and tariffs are revised when PUCSL reviews them — check the latest PUCSL publication at signing (https://www.pucsl.gov.lk).

Read that table and the first trap appears. Many people assume the electricity bill is simply the kWh rate multiplied by consumption. Above 42 kVA the demand charge is levied on kVA and is not directly tied to how much you actually use — if you apply for a large allowance and your peak reaches it, the charge stands even in a month when you barely operated.

Why are upgrade costs split at the plot boundary?

Upgrade costs are usually not a single number but a question of who pays on each side of a line.

• Inside the boundary (transformer plinth, switch room, incoming cable modifications): borne by the customer or the owner.
• Outside the boundary (LV/MV network development): under CEB's 2025 charges, CEB bears up to a cap of LKR 400,000 per customer and may charge the excess to the customer.
• Overhead connection at the standard flat charge covers up to 50 metres from the plot boundary; anything beyond 50 metres is charged per metre. On the same road, a different distance to the connection point can shift the quote noticeably.

So the contract needs to state four things: who applies to the utility (EDL now accepts online applications for new connections), who funds it up front, how it is settled against receipts, and who is liable if energisation is late. Confirm the current acceptance channel with EDL / CEB (https://www.ceb.lk).

Can you get your own meter and pay the utility directly?

Paying the utility directly is obviously simpler, but a separate connection has prerequisites: the unit must be physically and electrically separated from the rest of the building, it must have its own assessment number issued by the local authority, and the company must have a business registration certificate. Miss one and, in the usual case, the connection cannot be set up.

If it cannot, you are on landlord re-supply. Then the contract has to lock down three things: pass-through at the utility's own billed rates with no markup added; a written allocation formula; and a copy of the bill each month for reconciliation. Electricity tariffs in Sri Lanka are set by PUCSL, and earning a margin on re-supply generally requires a licence or exemption — have a local lawyer or licensed professional confirm the compliance position for your arrangement, and do not simply accept a markup percentage in the lease by default.

How should the electricity cost-sharing clause be written?

There are three models. State which one applies in the contract:

1. Sub-meter reading × official tariff: the cleanest option, provided the sub-meter is calibrated and both sides can read it.
2. Area-based allocation of common load: suitable for lobbies, lifts and common lighting that cannot be metered separately.
3. Fixed flat charge: only for small offices with very stable consumption, and with an agreed annual review mechanism.

Where a bulk meter is shared, agree separately how the demand charge is split. The utility bills on the highest demand recorded at the meter, and that peak may have been set by the neighbouring tenant's night shift. Common approaches are pro-rata to each sub-meter's maximum demand, or by floor area; state which one, and agree how a dispute gets reviewed.

Finally, add a tariff-adjustment clause: when PUCSL revises rates, the electricity charge follows the latest statutory rates on a pass-through basis, and the rent is not reopened because of it.

Backup generator: what should the lease pin down?

Backup power is not one question but four.

Permitting. On-site or shared diesel generators fall under the Environmental Protection Licence (EPL), must meet noise and emission standards, and are typically valid for 1 to 3 years, with renewal applied for before expiry. Ask the landlord for the current valid EPL and confirm that the generating set it covers is the one you will actually rely on. Check against the latest requirements of the Central Environment Authority (https://www.cea.lk/).

Coverage. Write down which loads the generator carries during an outage — servers and network, lighting, access control, cold storage, or the whole building. Do not assume “everything”.

Transfer conditions. How long after a mains failure it starts, whether that is automatic or manual, and what carries critical equipment through those few seconds.

Fuel and maintenance. This is the part most often glossed over. Generating costs far more than mains power, so the contract should specify how fuel is measured (hour meter, fuel log or dedicated meter), what the diesel price is indexed to, how no-load running and losses are treated, who bears maintenance, what the annual cap is, and how much notice is given before routine tests.

Why is “enough today” not the same as “enough in the contract”?

This is where deals come apart most often.

Contract demand is a number in the schedule to the supply agreement, not a verbal assurance. The “it's enough” you hear at signing refers to the current tenant's consumption. Whether that allowance can be transferred to you, how any excess is upgraded, and how you keep operating during the upgrade — if none of it is in the lease, none of it has been agreed.

The cost usually lands at both ends. Time: bulk supply approval plus on-site works takes far longer than expected, and your rent-free period is already running while you wait. Money: in-boundary upgrade costs, demand charges and generator fuel can all land on you, with no contractual basis for sharing them.

So the lease should carry at least three clauses: the capacity and supply category the premises must have on the handover date (as numbers, not “sufficient for the intended use”); remedies and rent-free or termination triggers if it is not met; and who initiates an upgrade beyond the agreed capacity and how the cost is split.

Pre-signing checklist

• Complete electricity bills for the last 6 months (not payment screenshots)
• Contract demand, voltage level and supply category from the schedule to the supply agreement
• Transformer capacity and how much is already allocated
• Whether the three conditions for a separate connection are met (electrical isolation, assessment number, business registration certificate)
• Cost sharing and up-front funding for in-boundary and out-of-boundary works
• Allocation formula for energy and demand charges, obligation to provide bill copies, tariff-adjustment clause
• Generator EPL validity, covered loads, transfer conditions
• Fuel metering method, maintenance responsibility and annual cost cap

If the project sits inside a BOI zone or an export processing zone, the supply connection is often coordinated by the zone administration, and the applicant and cost-sharing arrangements differ from sites outside the zone — confirm separately with BOI (https://investsrilanka.com/).

This article is general information only and does not constitute legal, tax or immigration advice. Specific requirements are governed by the latest positions of the relevant Sri Lankan authorities and of the licensed professional firm you appoint.