Sri Lanka to call for fresh tenders for power projects and power purchase agreements
Sri Lanka’s State Minister for Power Mahindanda Aluthgamage has reportedly said the government of Sri Lanka has cancelled 175 mini-hydro deals that had been hurriedly signed by the previous government and another 190 mega watts (MW) of plants held up without power purchase agreements which will be re-tendered.
“We decided to cancel 175 letters of intent (LOIs) given by the Sustainable Energy Authority shortly before the Presidential elections,” Aluthgamage has been quoted as saying.
The Minister has said another 190MW of renewable energy plants for which LOIs were awarded were stuck at the Sustainable Energy Authority for up to five years because Sri Lanka’s state owned power company, Ceylon Electricity Board (CEB) refused to sign Power Purchase Agreements.
“The CEB did not sign because they were not awarded on competitive bidding,” Aluthgamage has said.
“According to the CEB Act they have be competitively tendered. We have decided to cancel the 190MW and call for competitive bids.”
The CEB is caught in both capacity and financial crises as a planned 500MW coal plant was cancelled by the last administration, and no tariff hike was given as the rupee collapsed due to liquidity injections, which pushed up all costs including coal, local media reports state.
OSL take:
Sri Lanka’s looming power crisis has resulted in the expansion of business/investment opportunities in the country’s power and energy sector. The government of Sri Lanka is looking at increasing the country’s power generation capacity with special focus being given to renewable energy generation. Foreign businesses could therefore explore business/investment opportunities in Sri Lanka’s power and energy sector.
| Article Code : | VBS/AT/20200131/Z_2 |