December 29 (LBO) – Sri Lanka has signed a deal Friday with India’s National Thermal Power Corporation to build a 500 million dollar coal power project in the east of the island. The 500-megawatt capacity project to be built in Trincomalee will be jointly held by the state utility, Ceylon Electricity Board (CEB) and the Indian energy company.
Under the terms of the joint venture, 30 percent of the project will be funded through equity and the balance through debt, a senior official with the CEB, told LBO.
National Thermal Power Corporation will conduct a feasibility study of the project, which is likely to take about six months, with land already identified.
National Thermal power Corp will act as consultants. A joint team has been set up to do a feasibility study and obtain environmental clearances, the official said.
The plant due to be completed by 2011, will burn about 2.5 million tonnes of coal a year which will is likely to be imported from Indonesia or Australia.
This project is the second coal power plant lined up for the island, with the first 300-megawatt plant to be constructed in Norachcholai, also by 2011.
Sri Lanka needs large,