Business

New Fortress investment yet to materialise

  • Delay blamed on Govt. failure to fulfil some preconditions
  • Unsolicited project dogged by controversy since inception 

 – By Shenal Fernando 

Despite public assurances by New Fortress Energy Inc. following the Supreme Court decision in its favour that it would proceed with the agreement it entered into with the Government in September 2021, the promised investment is yet to materialise, sources reveal.

Speaking to The Sunday Morning Business, Ceylon Electricity Board (CEB) Acting General Manager Eng. Dr. D.C.R. Abeysekera stated that there had been no development in the agreement between the Government and New Fortress Energy and that the expected investment had not materialised yet.

Explaining further, he stated: “We signed an MoU with them last year. However, after that there have been no other developments.”

He further admitted that the delay in the materialisation of the investment by New Fortress Energy was due to the failure on the part of the Government to fulfil certain preconditions.

Speaking to The Sunday Morning Business, Treasury Deputy Secretary R.M.P. Rathnayake stated that the next step involved both parties entering into an agreement and that the current delay was due to a failure on the part of the Government.

The MoU signed between New Fortress Energy and the Government specified that New Fortress Energy would acquire a 40% ownership stake in West Coast Power Limited (WCP), the owner of the 310 MW Yugadanavi Power Plant based in Colombo, along with the rights to develop a new LNG terminal off the coast of Colombo.

As part of the transaction, New Fortress will have gas supply rights to the Kerawalapitiya Power Complex, where 310 MW of power is operational at present and an additional 700 MW is scheduled to be built. This includes the 350 MW of the Sobadhanavi Power Plant scheduled to be operational by 2023.

Under its gas supply rights, New Fortress Energy will provide Sri Lanka an estimated 1.2 million gallons of LNG (~35,000 MMBtu) per day to supply both the currently operational 310 MW Yugadanavi Power Plant and the Sobadhanavi Power Plant.

This project, which was an unsolicited proposal, has been linked with controversy from its inception and has led to widespread allegations relating to corruption with allegations made by certain Cabinet members that they were not informed of certain details of the project.