Sri Lanka’s 10MW solar power plant commissioned, lead financing by DFCC

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Dec 22, 2016 (LBO) – Sri Lanka’s first 10MW grid connected solar power project implemented by the private sector was commissioned on Wednesday, with DFCC Bank acting as lead financiers to the project.

Promoted by Sagasolar Power (Pvt) Ltd, the utility-scale power project located in Buruthankanda, Hambantota is expected to add 19GWh of clean energy to the national grid annually for upwards of 25 years.

“The successful commissioning of this project is thus a major milestone in the harnessing of Sri Lanka’s indigenous non-conventional renewable energy resources,” DFCC Bank said in a statement.

In financing this project, DFCC Bank partnered with Commercial Bank of Ceylon and Hatton National Bank as co-financiers, and with the European Investment Bank to source green funding.

A utility-scale solar facility feeds into the grid, supplying a utility with energy and typically has a power purchase agreement, guaranteeing a market for its energy for a fixed term of time.

“DFCC is also financing another 10MW solar project being implemented at the same location by Anorchi Lanka (Pvt) Ltd.”

“Analysed and structured by DFCC’s multifaceted team, this financing arrangement reflects the Bank’s commitment to develop the renewable energy sector as well as play a pivotal role in national economic development.”

DFCC Bank said it has a track record in financing renewable energy projects, having financed more than 70 projects across a broad spectrum of technologies.

In 1996, the Bank financed Sri Lanka’s first privately-owned, grid connected mini-hydro power plant, with both long term debt and equity.

“The success of this pioneering project catalysed the harnessing of the country’s non-conventional renewable energy resources resulting in a nationally significant industry, which today supplies nearly 10 percent of the nation’s electricity needs.”

DFCC was appointed as the administrative unit of the Energy Services Delivery Project (1997-2002) and the follow on Renewable Energy for Rural Economic Development Project (2003-2011) financed by the World Bank-Global Environment Facility and the government.

Under these credit lines, more than 180MW of renewable energy generation capacity was added to the national grid and more than 139,000 rural households were provided with electricity through off-grid schemes.

DFCC also became the pioneer financier for private sector wind power projects in Sri Lanka, when it part financed the first wind power project in 2010.

Its involvement in this undertaking extended beyond financing, to facilitating the introduction of a cost-based, technology-specific tariff structure. This enabled projects using wind technology to be commercially viable and spurred development of this form of renewable energy in Sri Lanka.

DFCC has also financed a manufacturer of turbines for local and foreign hydro power plants. This project was the recipient of ADFIAP’s award for ‘Outstanding Project-Technology Development’.

DFCC Bank has also extended funding to local hydropower developers to set up projects overseas.

Arjun Fernando, CEO, DFCC Bank, said: “DFCC Bank is proud to be associated with the nation’s first 10 MW solar power project as the Lead Financier.”

“We would like to congratulate Sagasolar Power (Pvt) Ltd for successfully commissioning this ground-breaking project, which will provide a boost to Sri Lanka’s efforts in harnessing sustainable energy solutions.”

“Our domain of expertise and customised financial solutions are of critical importance in seeing such projects reach fruition. DFCC is on a path of robust expansion and we envision growth in this and other sectors that will spur greater economic development in the country.”