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SL-India negotiations for LNG Power Plant on hold

04 Oct 2020

By Maheesha Mudugamuwa The negotiations between Sri Lanka and India for the construction of a 300 MW liquefied natural gas (LNG) power plant is at a standstill, as the new Government is yet to take a decision on whether or not to continue with the project, The Sunday Morning learnt. A well-informed source attached to the Ministry of Power said that several rounds of discussions were held between the two parties under the previous Government, but the new administration is yet to give its consent to the agreements reached between the two parties. “India was keen on funding an LNG power plant of around 500 MW, but under the Ceylon Electricity Board (CEB) Long-term Energy Generation (Expansion) Plan, the system could accommodate only another 300 MW and therefore, several rounds of discussions were held,” the source said, adding that at present, the negotiations were at a standstill as the CEB has decided to go for project tendering. When contacted by The Sunday Morning, CEB Chairman Eng. Vijitha Herath said negotiations had not yet begun under the new Government and that the CEB was fully focused on the tendering processes. Yet, the unsolicited proposals, such as government-to-government, will be considered in the future if there is a request, he said. Meanwhile, the CEB is to call for tenders for the construction of the second LNG power plant in Kerawalapitiya next month. Herath said that along with the construction of the LNG plant, the tender would also be called for the LNG supply next month. Furthermore, he said the construction of the already tendered LNG power plant would commence next month. Meanwhile, Minister of Power Dullas Alahapperuma had stated that two LNG power plants will be constructed by the year 2023 as a solution to the power crisis in the country in the future. He has also stated at a meeting held at the CEB last week that during the last five years, only 300 MW was added to the national grid but the demand for electricity is growing at 6% a year. The Minister had said that for the country to be in line with the President’s “Vision for Prosperity” policy statement to address the potential power crisis in the future, the contribution of green and renewable energy to the country’s power grid should be increased to 70% by 2030.


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