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Sri Lanka’s Public Utilities Commission approves PPA for 300MW LNG plant

Sri Lanka’s Public Utilities Commission approves PPA for 300MW LNG plant

The Public Utilities Commission of Sri Lanka (PUCSL) has reportedly granted approval to the Power Purchase Agreement (PPA) of the 300MW LNG plant, paving the way for the construction of Sri Lanka’s first major power plant in a decade.
PUCSL Chairman Janaka Ratnayake has told Daily FT that the newly appointed commissioners of the PUCSL had approved the PPA between the Ceylon Electricity Board (CEB) and Lakdhanavi to build the 300 MW Kerawalapitiya LNG power plant.
The approved PPA is more aligned with the original document and was more favourable to the government of Sri Lanka, consumers and licensee CEB compared to the previous agreement, he has told the media.
Ratnayake has further insisted there was no delay on the part of the regulator and the reason for the project dragging on was largely due to the long period that was taken for the tendering process.

“We had received the PPA for approval on 9 October 2020 and the PUCSL had observed there were amendments made to the initial draft PPA, which was sent to the PUCSL earlier with the Request for Proposals (RFPs). The PUCSL observed the new PPA was unfavourable to the CEB, consumers and the Government. Therefore PUCSL granted conditional approval on 25 November to the new PPA requesting CEB and Lakdhanavi to include 18 conditions that were excluded from the original document,” Ratnayake has added.
The CEB has made the amendments accordingly as requested by the regulator and submitted the new document for approval on 1 December 2020.
“We expect the CEB will take action to build this least-cost power plant in a timely manner to cater to the country’s electricity demand. I have already signed the documents to allow CEB to instruct Lakdhanavi to commence construction as soon as possible,” Ratnayake has said.
The 300mw combined-cycle dual-fuel LNG power plant at Kerawalapitiya will be the first plant to be constructed after the first phase of the Lakvijaya Coal Plant in Norochcholai was completed almost a decade ago. The plant is to be constructed under the Build, Own, Operate and Transfer (BOOT) system.

OSL take:

Sri Lankan authorities on a continuous drive to provide sustainable solutions to the pending power crisis in the country. The government of Sri Lanka is continuously promoting business/investment opportunities in the country’s power sector. Sri Lanka’s demand for power is on a constant increase with the country fast becoming a business hub in the South Asian region given its geographical positioning in the Indian Ocean. Foreign businesses/investors could explore opportunities in Sri Lanka’s power sector.

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Article Code : VBS/AT/20210308/Z_3

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