Gaia Group to make $ 61 million investment on solar projects in Central and North Central Provinces.
The Morning: Committed to accelerating the transition to renewable energy to address the future power demand growth in Sri Lanka, Gaia Greenenergy Group recently announced the installation of rooftop solar systems for 100 MW worth an investment of $ 61 million in the Central Province and the North Central Province.
In the second phase of these projects, the capacity and investment would double to 200 MW and $ 122 million, respectively, with the projects to be completed within 18 months.
Accordingly, Gaia Greenenergy Group has entered into two agreements with the Board of Investment (BOI) for these projects. The signing of agreements took place recently at the Investor Facilitation Centre (IFC) of the BOI headquarters in the presence of State Minister of Investment Promotion Dilum Amunugama, BOI Chairman Raja Edirisuriya, and directors of Gaia Greenenergy Group.
The two agreements were signed to set up and operate rooftop solar photovoltaic (PV) systems to generate electricity for the national grid under the Net Plus Plus Scheme of the Ceylon Electricity Board (CEB) using rooftops of schools, hospitals, and other Government buildings belonging to the Central Provincial Council and North Central Provincial Council.
The group has already secured concessions in the Uva, Southern, Western, and Sabaragamuwa provinces for a total capacity of over 500 Megawatts-peak (MWp) and foreign direct investment (FDI) of $ 300 million. The group stated it has already commenced the development of 20 MWp in the Uva Province and have completed most of it.
It will be working under a revenue-share model, where they share 15-16% of the top-line revenue with the relevant provinces giving the provinces their highest revenue source once the project is completed. Once the national programme is operational, it is expected to generate 750 Gigawatt hours (GWh) of energy annually and save $ 400 million of diesel imports for power generation per annum.
A study conducted by the University of Moratuwa proved that 65 MWp of rooftop solar in the Uva Province can eliminate daytime power cuts without a disturbance to the national grid. These power cuts have seriously impacted small to medium enterprises (SMEs) and industries and medical clinics.
Given the distributed nature of rooftop solar projects, they contribute greatly to stabilising the grid and significantly reducing transmission and distribution losses. Additionally, these projects can be developed and scaled much faster than the large ground-mounted projects given that ground-mounted projects require complex multi-institutional approvals and usually compete with valuable agricultural lands.
OSL take:
The ongoing power crisis in the country has opened up a host of new business/investment opportunities in Sri Lanka’s power industry, especially in the renewable energy generation sector. The government of Sri Lanka has also expressed its commitment to increasing the country’s renewable energy component to 70 percent by 2030. Given the overall expansions in key economic sectors, Sri Lanka’s demand for power has seen and increase with the country faced with around 120MW shortfall in the annual power generation. The focus therefore is to bridge this gap through the development of renewable and clean energy sources. With Sri Lanka working towards becoming an emerging business destination in the South Asian region, there will be a further growth in the demand for power in the country, indicating a steady growth and business potential in Sri Lanka’s power industry. Local businesses engaged in the renewable energy generation sector have recorded a steady growth and profits even amidst challenging economic conditions. Many foreign businesses have already shown interest in investing in Sri Lanka’s renewable energy generation sector. Given all these factors, foreign businesses/investors could confidently explore the growing opportunities in Sri Lanka’s power industry, especially in the renewable energy generation sector.
Article Code : | VBS/AT/14112022/AT_5 |