NTPC to set up $700 million JV plant in Sri Lanka
07 Sep 2011
State-owned National Thermal Power Corporation (NTPC), India's largest power generation utility, has entered into a joint venture agreement with the Ceylon Electricity Board (CEB) to put up a $700 million, coal-fired, 500 MW power plant in the island nation.
The joint venture project, first mooted in 2006, is expected to be completed by mid-2016. The capacity of the project might be enhanced later by another 500 MW.
The new plants – of two units of 250 MW each – will come up near Trincomalee in eastern Sri Lanka. Both NTPC and CEB are equal partners in the venture.
Arup Roy Choudhary, chairman and managing director, NTPC, and Prof Wimaladharama Abeywickreme, chairman, CEB, signed the agreement in Colombo. The financial closure is expected to be achieved in about a year. Other agreements, including the power purchase agreement with the CEB, will be signed soon.
India will extend a $200 million line of soft credit to Sri Lanka as part of its commitment to implement the agreement and also to build a jetty and transmission lines. The plant, which will be Sri Lanka's largest power plant, will be run on a build-own-operate basis.
P Uma Shankar, secretary, power, said a joint steering committee had been set up by the two governments to oversee implementation of the project.