The Ceylon Electricity Board (CEB), a State-run entity, has reduced its debt by Rs. 26 billion out of the Rs. 54 billion owed to West Coast Power Ltd. through the sale of 28% of its share ownership within LTL Holdings’ equity capital, The Sunday Morning learns.
This financial move has enabled the CEB to save approximately Rs. 2.6 billion annually in delayed interest payments that had accumulated on its debt.
CEB Finance Manager Nihal Fernando, speaking to The Sunday Morning, confirmed that despite the transaction, the CEB retained a 35% stake in West Coast Power, making it the second-largest shareholder after the Treasury, which held 51% of the shares.
“The advantage of paying off billions of rupees worth of delayed interest will pass on to consumers,” Fernando stated.
West Coast Power owns and operates the 300 MW Yugadanavi Power Plant in Kerawalapitiya – its sole function.
Its transactions are confined to payments to the Ceylon Petroleum Corporation (CPC) for fuel, procurement of specific chemicals as recommended by the equipment supplier, and management of the operation and maintenance contract.
The Yugadanavi Power Plant was constructed by Lanka Transformers Ltd. (LTL) and is owned by West Coast Power Ltd., with ownership distributed among the Treasury (51%), EPF (27%), Lanka Electricity Company (LECO) (18%), and LTL (4%).
Several years ago, New Fortress Energy (NFE) announced a framework agreement with the Government to build an offshore Liquefied Nitrogen Gas (LNG) receiving, storage, and regasification terminal near Colombo. This terminal will supply gas to the existing 300 MW Yugadanavi plant and a new 350 MW power plant.
As part of the agreement, NFE will construct a floating LNG storage facility and a pipeline to transfer LNG to Yugadanavi. The Cabinet has approved the transfer of a 40% stake in the Yugadanavi Power Plant from the Treasury to NFE, along with the rights to supply natural gas.
As per the West Coast Power management, the Treasury has not invested any funds in the company and its investment was made only for the purpose of financing power.