Sri Lanka will build two 300 MegaWatt coal power plants at the same time with Chinese financing and finish a 900MW facility in two phases instead of the originally planned three to cut the country's high power costs.
Information minister Anura Yapa said Sri Lanka's cabinet of ministers has given the nod for the
government to borrow 891 million US dollars from China to finish a 900MW coal power complex in Puttalam, in the island's West Coast.The first phase of 300MW is scheduled to finish at the end of 2010.
In the first phase of a coal plant, a coal handling jetty, a transmission line from Puttalam's Norochcholai area to Veyangoda and a grid substation is being built with a 455 million loan from China.
China's Exim Bank has given 300 million US dollars as a 'preferential buyer's credit' and 155 million US dollars as a 'buyer's credit'.
The second and third phases have been telescoped into a single phase in view of "the urgency of developing coal power", a cabinet note from the finance ministry said.
Sri Lanka has one of the highest power costs in the region due to heavy reliance on diesel plants as coal plants were opposed by environmental and religious activists.
Under the second phase a transmission line from Norochcholai to Anuradhapura, in north central Sri Lanka, would be built. New grid substations would be built in Anuradhapura and Chilaw in the west coast and coal handling port facilities expanded.
The 891 million dollar 'preferential buyer's credit' would be repayable in 20 years with 5 year grace at 2.0 percent interest.
A management fee of 0.5 percent would be charged after 30 days after the loan agreement becomes effective, and a commitment fee of 0.5 percent will be charged on the unutilized portions.
Image courtesy of colombopage.com
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