NTPC to develop 500 MW power plant in Sri Lanka

Colombo, Dec 29 (UNI) State-owned power major National Thermal Power Corporation Ltd (NTPC) today signed an agreement with the Sri Lankan Government and Ceylon Electricity Board (CEB) for setting up a 500 MW coal-based power project in the eastern port city of Trincomalee, with project site yet to be decided.

''The project, expected to commence operations from 2011, would involve an investment of 500 million dollars and would be implemented by a joint venture company to be formed with a stake of 50 per cent each by NTPC Ltd and CEB,'' Power Secretary R V Shahi told reporters here today.

The project would be funded with a debt equity ratio of 70:30.

This is the first overseas investment on a power plant by NTPC, wherein the Indian government owns 89.5 per cent equity with the market capitalisation of approximately 25 billion dollars.

Although the Lankan government has suggested Sampur be consdered as a possible site for the construction of the power plant, the Indian government has said that the final site would be selected only after a consensus based on the techno-economic feasibility study which is expected to commence within two months by the NTPC, Mr Shahi said.

He said that the objectivity of the project was to produce cheaper power (likely to be two and a half time cheaper than the present power generation in Sri Lanka) considering the consumer benefit and overall economic development here.

''The signing of the agreement will commence the process of site selection in Trincomalee which will be done on the basis of techno-economic and environmental feasibility studies and other relevant matters including availability of infrastructure such as port, highway network and railhead,'' Mr Shahi added.

He said although the government and the NTPC had already suggested a location next to the oil tank farm of the Indian Oil Corporation at China Bay as a site for the power plant construction, they have agreed to do a feasibility study on the locations suggested by the Sri Lankan government.

The Managing Director of the JV company for the first eight years will be appointed by NTPC and there will be an equal representation in the its Board from NTPC and CEB.

Commenting on the possible environmental hazards due to the proposed project, NTPC Chairman and Managing Director Sankarlingam said all of NTPC plants in India are accredited with ISO 14001 Certification and therefore the project will be environment friendly.

The MoU was signed by Mr T Sankaralingam, Chairman and Managing Director of NTPC, Mr M M C Ferdinando, Secretary, Power and Energy, Government of Sri Lanka and Mr Perera, Chiarman of CEB.

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