Sri Lanka, India US$500mn coal plant deal inked

Sept 06, 2011 (LBO) – Sri Lanka’s state-run Ceylon Electricity Board and India’s National Thermal Power Corporation inked a deal to build a 500MegaWatt coal plant in the island’s northeast coast. The 50/50 joint venture will begin construction at Sampur in Trincomalee, in late 2012 and is expected to be commissioned in 2016, CEB chairman Wimaladharma Abeywickrama said.

Sri Lanka’s power ministry secretary M M C Ferdinando said the plant would cost 500 million US dollars.

Each partner would put 15 percent of the cost – about 75 million US dollars – as equity and the balance would come from multilateral and bilateral lenders and commercial sources.

The shareholder agreement was inked Tuesday in Colombo. The plant is structured as a build operate own (BOO) project.

India’s power secretary Uma Shankar said financial closure would be in achieved in the next few months.

India is also giving a 200 million dollars loan to Sri Lanka’s government to cover CEB’s equity, jetty construction to unload coal and interconnection to the national grid.

India’s envoy to Colombo Alok Kantha said the joint venture company would be registered after the signing and the preliminary work