The CEB has also built a grid substation under a Japanese funded 3.2 billion rupee project which will improve power supply to Killinocchi and surrounding areas, power minister Champika Ranawaka told reporters.

Resettled war refugees are given power free for a year, he said.

Tamil Tiger separatists had destroyed two power lines running from Vavuniya to Kilinocchi and Vavuniya to Mannar in October 1987 just as an Indian peace keeping force started an offensive, Ranawaka said.

The CEB has run a 33kVA 'express line' (a distribution size line with no step down transformers on the way) from Kilinocchi to the Jaffna peninsula to connect the national grid to Jaffna, assistant general manager in charge projects Shavi Fernando said.

Next year a high tension 132kVA transmission standard line from Kilonocchi to Chunnakham is to be commissioned along with a grid substation in Chunnakham north of Jaffna town.

Jaffna has its own grid supplied by thermal generators in Chunnakham.

CEB is also building a 3.5 billion rupee furnace oil plant in Chunnakham with financing from Lanka Electric Company, a CEB subsidiary, to improve generation capacity in Jaffna, Ranawaka said.

The CEB is expected to make an annual loss of 2.8 billion rupees supplying power to 121,000 customers in Jaffna using thermal generators, he said.

Minister Ranawaka said the new plant which is to completed by the end of the year will reduce generation costs as the utility was now paying about 38 rupees to Agrecco, a private power supplier.