Sri Lanka - India 500MW Coal Plant to be Built in Muttur, Trincomalee District; Formal Agreements to be Signed in November

09th October 2009, www.lankabusinessonline.com

Ceylon Electricity Board, Sri Lanka's state-run power utility, will sign a firm deal with India's National Thermal Power Corporation (NTPC) to build a 500MegaWatt coal plant in November, an official said.

The plant is a 50/50 joint venture between CEB and NTPC with each partner putting 75 million US dollars of equity and 350 million US dollars in debt, additional general manager - transmission, Ranjith Gunawardana said.

Gunewardana said a power purchase agreement, a joint venture agreement and an implementation agreement would be signed in November following approval from Sri Lanka's cabinet of ministers.

He said a CEB official was in India and final touches were being put on the agreements. Once a power purchase agreement was signed, the coal plant would approach international lenders for debt financing, he said.

Land for the plant in Muttur, in the north eastern Trincomalee district, has already been vested with the state, officials said.

Construction is expected to begin in 2010, Gunawardana said.

The plant can be expanded up to 1,000MW in a second stage.

China is already funding and building the first 300MW stage of a 900MW coal power plant to be owned by the CEB in Sri Lanka's west coast.