The unit will come up at Sampur in Trincomalee at an estimated cost of Rs 3,150 crore.
State-run power producer NTPC will set up a 500-Mw coal-based power plant in Sri Lanka by 2016, which will mark its foray into the overseas market.
The plant (2x250 Mw), estimated to cost Rs 3,150 crore , will be set up at Sampur in Trincomalee. A joint venture agreement to this effect was signed between NTPC and the Ceylon Electricity Board (CEB) today in Colombo.
NTPC already has a memorandum of understanding in place with the Bangladesh electricity board for setting up two power plants of a combined capacity of 1,320 Mw, at an estimated cost of Rs 7,000-8,000 crore. It is yet to formalise a joint venture (JV) for the venture in Bangladesh.
The JV for the Sri Lankan project will be incorporated in Sri Lanka, with NTPC and CEB each holding 50 per cent equity. The Sri Lankan government will give land for the project on a long-term lease.
Coal for the project will be imported and supplied by Lanka Coal Company (LCC) and the power generated will be supplied to the CEB.
According to an agency report, Sri Lankan power and energy secretary M M C Ferdinando estimated the total cost of the project to be $500 million (Rs 2,250 crore).
NTPC said it expected the cost to be around $700 million (Rs 3,150 crore). While 70 per cent of the cost is to be generated through external sources, CEB and NTPC would bear the balance.
“The government of India has offered a concessionary line of credit of $200 million to the government of Sri Lanka to fulfill its commitments under the implementation agreement,” an Indian High Commission spokesman said in Colombo.
The power plant would meet the growing demand for power in Sri Lanka, NTPC said. NTPC, which has a total installed capacity of 34,854 Mw, plans to become a 128,000-Mw company by 2032.
CEB generates, transmits and distributes electricity to all categories of consumers in Sri Lanka. It operates 24 power plants, with an aggregate installed generation capacity of 2,058 Mw.
Another government-controlled company, Power Grid Corporation of India Ltd, is also planning to set up an electricity transmission link of 1,000 Mw between India and Sri Lanka, of which 30 km will be under the sea.
The link will run from Madurai in Tamil Nadu to Anuradhapura in Sri Lanka’s north-central province.