Two decades overdue, the 300 megawatt plant as well as supporting infrastructure will be entirely funded by the Chinese government, Ranjith Fonseka, General Manager for the sole power utility, the Ceylon Electricity Board, told LBO.

Supporting infrastructure will include cargo and coal handling facilities as well as a 115 kilometer transmission line. The entire project will take about four years to build.

Feasibility and environmental clearances are ready, with 74 families currently being resettled to acquire the land for the project - a process that could take six months.

“We are being ambitious but are working to begin construction on the ground by the end of this year,” Fonseka said.

A coal power plant at Norachcholai in Puttalam has been a political hot potato, with successive governments shelving the project due to political pressure over the best site.

A coal power plant will give Sri Lanka’s strained generating system a boost, with a critical need for a large base load power plant to meet growing electricity needs.

Sri Lanka’s daily electricity demand is 25 million units and growing at eight percent each year. Heavy dependence on thermal power has taken costs of production to over Rs. 10 a unit.

The government claims a coal plant will reduce electricity charges by as much as 13 percent in 2010. Domestic consumers pay an average of Rs. 7.70 a unit currently.

Sri Lanka however needs three 300 megawatt plants over 15 years to keep up with projected electricity demand, according to CEB’s Generation Planning Report.

-Zainab Ibrahim: zainabi@vanguardlanka.com