"But most probably by May CEB will improve their cashflow situation and the situation will become better."
He was responding to a question on the status of delayed payments to independent power producers (IPPs) after the CEB was issued a license by the island's newly set up power regulator.
The Central Bank said the CEB owed 57 billion rupees to independent power producers and the Ceylon Petroleum Corporation by the end of last year. It had also lost 35 billion rupees in 2008 and its long-term loans were repaid directly by the Treasury.
Though oil prices are now lower than last year, and tariffs are also higher, low rainfall has forced it to use more thermal power.
The main rainy season of the island, the South-Western monsoon, starts in May.
The CEB can store 1,200 million units (GigaWatt_hours) worth of water at its reservoirs but it had started 2009 with only 600GWh worth hydro storage.
Lower than expected rainfall in the second half of 2008 as well as the first quarter of 2009 had lowered hydro storage to around 300 GWh, pushing the utility to rely more on thermal energy, worsening its cash problems.
The CEB had avoided official power cuts so far this year by increasing thermal generation, including expensive gas turbines.
"It is not possible to say definitely whether there will be power cuts or not in the future, but the government policy is not to have power cuts," power minister John Seneviratne said last week.
Delays in building a coal plant and the last large hydro plant in Upper Kotmale due to political interference had forced CEB to go for diesel and furnace oil plants - most from the private sector - at the last minute.