Growing Money

Mar 22 (LBO) – Lanka Transformers were given a first subsidy payment on Wednesday for generating electricity from trees, under a new scheme to encourage investment in renewable power.

Wood or dendro power producers are being given Rs2.50 a unit, to top up current rates of Rs6.00 that the Ceylon Electricity Board (CEB) pays independent power producers.

The Treasury has put in Rs100 million for as seed capital for the fund which makes the top up payments with a first Rs25 million tranche for this year to pay off existing dendro producers.

Lanka Transformers and Haycarb are currently the only two firms to operate dendro power plants of 1 megawatt and 300 kilowatts that are connected to the national grid.

There had been difficulty running these plants because CEB’s current tariffs were not enough to cover operational costs, Ananda Gunasekera, Chairman of the Energy Conservation Fund (ECF), told journalists.

State utility the CEB pays private developers who supply electricity to the national grid, on the basis of a Standard Power Purchase Agreement

The subsidy funds will be routed through a new Sri Lanka Energy Fund that has been set up and will be man