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Sri Lanka gets Chinese loan for coal power expansion

June 30, 2009 (LBO) - Sri Lanka has got Chinese financing to add 600 Mega Watts of coal powered capacity to a generation complex where the first stage is scheduled to be completed next year, a government minister said.
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The loan will carry an interest rate of only two percent and is repayable over 20 years.

"We hope to generate power at the coal power plant at a unit cost of 7-8 rupees which will allow the CEB to turn its present losses into a profit and allow it to reduce consumer tariffs," he said.

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"The main reason for power to cost so much now is because of our dependence on petroleum - 60 percent of our power is generated by diesel, so when diesel prices are high, the cost of power is also high.



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"

The CEB is now losing 1.50 rupees a per unit of electricity which it sell at 13 rupees but which costs 14.

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50 rupees to generate, Seneviratne said.

The coal power project will make a "tangible difference" in the CEB's generation costs and enable it to reduce dependence on and use of high-cost diesel power plants.

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Power and Energy Minister John Seneviratne said the two governments had signed a commercial agreement for the second phase of the Norochcholai coal power project in the north-western Pu

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