Sri Lanka government approves signing of MOU between China Machinery Engineering Corporation and Ceylon Electricity Board
The government of Sri Lanka has last week granted approval to the signing of a memorandum of understanding (MOU) between China Machinery Engineering Corporation (CMEC) and the state owned Ceylon Electricity Board (CEB) to set up the much-awaited 400MW liquefied natural gas (LNG) plant in Hambantota with an equity ratio of 70/30.
Power and Renewable Energy Minister Ranjith Siyambalapitiya has reportedly received Cabinet approval to work with Hambantota Power Ltd. (HPPL), which is a fully owned subsidiary of CMEC and has been nominated by the Chinese Embassy as the joint venture partner for the LNG project.
The project will be implemented on a government to government basis, as part of Sri Lanka’s plan to set up three LNG plants with the help of China, Japan and India.
However, the MOU is to be signed by CEB and CMEC, as per discussion held with all stakeholders including the National Agency for Public Private Partnership (NAPPP).
According to Minister Siyambalapitiya, the participation of Hambantota Power will only be taken following discussion between CEB and CMEC.
The Minister has also added that the Chinese government has agreed to supply power from the plant at a lower price than the prices tendered for the recently approved 300MW LNG power plant.
The Sri Lankan government is in the process of exploring renewable energy generation options for the country in order to face the looming power crisis in 2020. Apart from the LNG power plant, the government is also looking at setting up two more LNG power plants in the country. Japan and India are being looked at to set up the two remaining LNG plants. Interested foreign power companies could look at forming partnerships with the stakeholders in the project or even come forward with other renewable energy generation options.
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