NTPC Lanka plant report likely to be ready by Jan

NTPC Ltd plans to get the detailed project report for a proposed $700-million thermal power project in Sri Lanka ready by January.

While the coal-fired project is important in being NTPC's first overseas unit, there is also a larger strategic significance as China has already made an entry into the island-nation's electricity sector.

Official sources said the progress on the NTPC project was reviewed at an interaction between the power ministers of both countries on the sidelines of a SAARC Energy Ministers' meet in Dhaka recently where it was decided that the DPR would be prepared by early next year to get the project off the ground.

Financial closure

Earlier last month, NTPC had announced the formation of a joint venture with Ceylon Electricity Board (CEB) to establish the 500-MW plant (2x250 MW) near Trincomalee in eastern Sri Lanka. The joint venture company is to be incorporated in Sri Lanka, with 50:50 equity contribution by NTPC and CEB. The project is expected to achieve financial closure in about a year's time.

India will offer a line of credit of $200 million to Sri Lanka for the joint venture project, which is expected to be completed by mid-2016. The project capacity may be enhanced by 500 MW.

China already has a presence in Sri Lanka's electricity sector, having commissioned a 300-MW unit at CEB's Norochcholai coal power project in the north-western region.

The second phase of the project, involving another two units of 300 MW each, is to be set up by the China National Machinery and Equipment Import and Export Corporation and will get access to concessional Chinese financing in the form of a soft loan.