Sri Lanka hydro electricity firm in power purchase deal

Dec 30, 2010 (LBO) – Hydro Power Free Lanka (HPFL) has entered into agreements with Sri Lanka’s state power utility and investment promotion agency to sell power and get tax concessions, according to a stock exchange filing. Its subsidiaries, Hydro Power Free Lanka 2 and Hydro Power Free Lanka 3, have begun building two min-hydro power plants of one megawatt each at Thebuwana and Stellenberg, it said.

The two subsidiaries have entered into small power purchase agreements with the Ceylon Electricity Board to sell power to the utility, the statement said, without disclosing details.

They two firms have also signed agreements with the Board of Investment, which grants tax holidays and other concessions like duty free imports to investors.

An initial public offer in October by Hydro Power Free Lanka to raise 350 million rupees to build three new plants was oversubscribed. The firm issued 35 million shares at 10 rupees each.

Hydro Power Free Lanka wants to build three new plants. It now has two power plants which sell power to the CEB.

A new 0.83 MW plant is to be built in Thebuwana and another 0.94 MW plant in Stellenberg for 150 million rupees each.

It also plans a larger plant in Halgran Oya for