Sri Lanka’s Cabinet green lights over $ 8 million Sampur-Kappalthurai electricity transmission project
Daily FT: The Cabinet of Ministers has approved awarding a multi-currency contract worth over $ 8 million to a joint venture between Ceylex Engineering Ltd. and China’s Xingneng Electric Power Construction Co. Ltd. for the Sampur-Kappalthurai Transmission Infrastructure Development Project.
The contract, valued at $ 4.15 million, € 0.78 million (about $ 0.9 million) and Rs. 1,096.08 million (about $ 3.3 million), excluding applicable taxes, covers key transmission infrastructure developments in Sri Lanka’s Eastern Province under a project funded by the Asian Infrastructure Investment Bank (AIIB).
The initial Cabinet approval for the project was granted on 15 December, 2025. The project involves constructing a new 220(132)/33 kV grid substation in Sampur and expanding the existing 220(132)/33 kV grid substation in Kappalthurai.
Addressing the weekly post-Cabinet media briefing, Cabinet Spokesman and Minister Nalinda Jayatissa said the initiative was aimed at strengthening the transmission system and ensuring optimal efficiency of the national electricity grid.
He said six bids were received following an international competitive procurement procedure to select a contractor. “The Ceylex Engineering-Xingneng Electric Power Construction joint venture was recommended by the High-Level Procurement Committee as the lowest substantially responsive bidder,” he added.
The proposal was submitted by Power Minister Anura Karunathilake.
OSL take:
Sri Lanka’s power sector is opening new business/investment opportunities for foreign investors and international companies as the country steps up investment in electricity transmission, grid modernisation and renewable energy infrastructure. The latest development is Sri Lanka’s Cabinet approval of a multi-currency contract worth over US$8 million to a joint venture between local engineering firm Ceylex Engineering Ltd. and China’s Xingneng Electric Power Construction Co. Ltd. for the Sampur-Kappalthurai Transmission Infrastructure Development Project in the Eastern Province. Funded by the AIIB, the project involves constructing a new 220(132)/33 kV grid substation in Sampur and expanding the existing Kappalthurai substation. It highlights opportunities for foreign engineering, procurement and construction companies through internationally financed infrastructure projects. Beyond transmission infrastructure, Sri Lanka’s power sector offers considerable investment potential in renewable energy, particularly solar, wind and offshore wind projects. The Sri Lankan Government’s ambition to increase renewable energy’s contribution to electricity generation creates opportunities for international developers, equipment manufacturers and technology providers. Energy storage is another emerging investment area, with battery energy storage systems expected to play an increasingly important role in managing renewable energy intermittency and improving grid stability. Foreign businesses could also explore opportunities in smart-grid technology, high-voltage transmission equipment, power distribution, grid automation and energy management systems. With growing electricity demand and the need to modernise national infrastructure, partnerships between international investors and local companies could support sector expansion. Sri Lanka’s power-sector development therefore offers opportunities beyond electricity generation, extending into engineering, technology, equipment supply and long-term infrastructure investment.
| Article Code : | VBS/AT/20261109Z_4 |