Jan 24, 2009 (LBO) – Sri Lanka has given tax concessions to an Australian consultancy to develop a 488 MegaWatt liquefied natural gas (LNG) fired power plant for the state-run electricity grid, the island’s investment promotion agency said. There was no mention whether a minimum volume has been guaranteed or whether a formal power purchase agreement has been signed yet.
The Board of Investment of Sri Lanka (BOI) which gives tax concessions for foreign investors said a 600 million US dollar investment deal has been signed with Lanka Alokha AB (Pvt) Ltd.
The firm is sponsored by ARC Development International of Australia, headed by Paul McMohan, BOI said. ARC is a consultancy operating in Australia and Malaysia.
The BOI said the LNG plant sited in Kerawalapitiya, north of Sri Lanka’s capital Colombo would eventually be expanded to a 1,000 MegaWatt facility.
BOI said LNG power would be clean and cheaper than other private power projects supplying Ceylon Electricity Board.
Unsolicited proposals for LNG have attracted controversy as the long-term generation plan of the CEB is based on building cheaper coal fired stations first. Due to delays in coal plants, Sri Lanka has high cost power.
The BOI statement said the