brand logo

Emergency power purchasing: CEB to acquire 3 pvt. power plants 

04 Apr 2021

  • Ace Power – Matara, Embilipitiya, and Asia Power Sapugaskanda 

  Initial discussions are underway to acquire three private power plants that had supplied emergency power to the Ceylon Electricity Board (CEB) during the past few years, CEB Chairman Eng. Vijitha Herath told The Sunday Morning.   He said that discussions are currently being held to acquire Ace Power Embilipitiya, Ace Power Matara, and Asia Power Sapugaskanda.  “We are still at the initial stages of the discussions and we haven’t taken a final decision as of yet,” he added.   However, the Cabinet of Ministers had last year (2020), rejected the proposal submitted by the Ministry of Power to obtain approval to extend existing power agreements with three private power companies to purchase around 170 MW of emergency power.    The proposal had been submitted to the Cabinet to extend the purchasing agreements with the three power plants, which will be terminated in April and June next year (2022). The three agreements altogether are to supply a total of 170 MW to the national grid.   Meanwhile, the Committee on Public Enterprises (COPE), in a report last year, revealed that Ace Power had offered to sell its Embilipitiya power plant to the CEB for Rs. 2,635 million but that the offer had been shot down.   When COPE questioned as to why the CEB did not purchase the private power plant when the cost would have been less than what the CEB would end up paying to purchase power for three years, then Ministry of Power and Renewable Energy Secretary Dr. Suren Batagoda had told the Committee that initially, an agreement had been signed for the purchase of electricity from the Embilipitiya power plant for a period of 10 years, which expired in 2015, and as the plant could be used for a further period of time, approval from the Government was received for further purchases.   Accordingly, the Valuation Department valued the plant at Rs. 2,370 million while the value submitted by the owner of the plant was $ 17 million (Rs. 2,635 million).  It was also noted that although negotiations were held, the owner had not agreed to transfer the plant at the valuation made by the Chief Valuer.   As a result, temporary approval had been granted by the Cabinet for the purchase of electricity for a period of six months until action was taken to acquire the said plant, taking into account the electricity requirement at the time.   Following discussions with the owner, the agreement was renewed on two occasions; initially, for one year up to 2016 and subsequently, up to 2017.    During this period, the policy of the Government was to halt any move to purchase power plants and instead purchase only electricity from private suppliers. As a result, the agreement between the CEB and Ace Power was extended by another three years with effect from April 2018.   COPE had stated that the annual report of the institution which owns the plants had revealed that it had posted a profit of Rs. 1.1 billion in 2016/2017 through the sale of electricity from the Embilipitiya plant. 


More News..