Sri Lanka green-lights PPA with United Solar Group for 700 MW solar power project
Daily FT: The Cabinet of Ministers has cleared the signing of a power purchase agreement (PPA) with Australia’s United Solar to invest in a 700 MW solar power project with a 1,500 MWh battery energy storage system.
Power and Energy Minister Kanchana Wijesekera said approval was given for the solar power project to be installed on the surface of the Poonakary Tank in the Killinochi District, with a Foreign Direct Investment (FDI) of over $ 1.72 billion.
In September, the Cabinet cleared the solicitation of Expression of Interest (EoIs) from potential investors interested in leading renewable energy projects with a capacity of 50 MW or more.
The project is poised to provide an impressive power supply of 134 MW, marking a significant step towards boosting renewable energy infrastructure in Sri Lanka.
“It is one of the biggest investments the Northern Province secured so far,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing held on 12 September.
The project represents a substantial foreign direct investment of $ 1,727 million, with $ 500 million earmarked for domestic project components. As part of the comprehensive plan, the project proponent company intends to construct three anicuts around Poonakari Lake, fortifying the area against potential seawater intrusion at an estimated cost of $ 13.5 million.
The Northern Provincial Council, the Northern Provincial Irrigation Department and the Agricultural Development Department have already extended their support, offering a 35-year lease agreement for 1,080 acres of the shallow lake area.
“This cooperative agreement is pivotal in facilitating the establishment of the 700 MW power plant, showcasing a collaborative approach towards realizing this groundbreaking renewable energy initiative,” Gunawardena added.
Sri Lanka’s overall economic activities and the growing demand for power has opened up a host of new business/investment opportunities in the country’s power industry, especially in the renewable and clean energy sectors. The government of Sri Lanka’s policy of increasing the country’s renewable energy generation component to 70% of the power mix and the incentives being offered to businesses in the sector have all resulted in the growth in business/investment opportunities in the power industry. The growth and profits recorded by local businesses engaged in the power industry, especially in the renewable energy generation sector, is indicative of the lucrative nature of the industry locally as well as its growing business potential. The business potential in the industry is further evident by the interest shown by many foreign businesses/investors to enter into the industry. Foreign businesses/investors could therefore confidently explore the expanding opportunities in Sri Lanka’s power industry, especially in the renewable energy sector. The development of infrastructure and supplementary infrastructure facilities required by the power industry in its renewable energy generation expansion also presents business/investment opportunities.
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