Sri Lanka’s CEB to receive ADB funding to get expertise to acquire an LNG terminal
Sri Lanka’s state-run Ceylon Electricity Board (CEB) has reportedly received funding from the Asian Development Bank (ADB) to tap international expertise to prepare bid documents to acquire a liquefied natural gas (LNG) terminal.
“We don’t have the expertise around LNG terminals so the ADB funding was made to available to us so we could consult experts recommended by the ADB in India and other countries to prepare a tender book,” Athula Wanniarachchi, past president of the CEB Engineers Union has been quoted as saying in the local media.
The Sri Lankan government has been entertaining several proposals from private parties to build LNG terminal provided the power utility purchases large volumes of LNG.
According to reports, in 2018, the Cabinet approved a controversial unsolicited proposals brought forward by the Ministry of Development Strategies and International Trade from countries like Korea and Japan to set up an LNG terminal by giving the firm the right to sell fuel to Sri Lanka for up to 20 years. If the fuel is not required, the CEB has to pay the terminal operator for the unused LNG, which is known as take-or-pay.
Sri Lanka is looking at building more LNG plants under a new power plan and diesel combined cycle plants that are now proposed have to be dual fuel.
OSL take:
The receipt of ADB funding for Sri Lanka to secure expertise to bid to acquire a LNG terminal of its own is a positive development in the country’s power and energy sector. Sri Lanka is currently facing a power crisis, which is expected to get worse by 2020. The Sri Lankan government is currently engaged in looking for mid –long term, cost effective solutions to address the looming crisis. Therefore, Sri Lanka’s power and energy sector has many opportunities for foreign businesses/investors to explore.
| Article Code : | VBS/AT/10042019/Z_3 |