Sri Lanka seeks private developers for three 350 MW power plants

The government of Sri Lanka is looking for private sector companies to bid for the construction of three new power plants in the country – each with a capacity of 350 MW. The government is offering the projects on a BOO basis and wants to bring the plants on line between 2004 and 2011.

Sri Lanka has desperate need for more electricity production but is also looking to diversify its fuel options away from a dependence on hydropower. It is estimated that the country will need an additional 2 500 MW of capacity by 2012.

The developer of these new plants has the option of oil or gas as a fuel and, in conjunction with the Ceylon Electricity Board (CEB), would need to identify a suitable site that permits delivery of power to the national grid.

Sri Lanka’s electricity industry is entirely state-controlled with the CEB responsible for generation and transmission and the Lanka Electricity Company (LECO) handling distribution. It is intended that the CEB will be broken up into separate companies dealing with generation, transmission and distribution. A 20-year Power Purchase Agreement (PPA) would be entered into between the project company and the CEB.

The project company would be permitted to secure and import its requirement of fuel, based on arms length transactions and would be totally responsible for the fuel supply for the project.

The Sri Lankan government is offering a package of fiscal incentives and concessions in connection with the project, based on the investment value.

Expressions of interest must be made by 5 November 2001.

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