Max The Boss
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Chinas association is so respectable, cordial and progressive for Sri Lanka. The Chinese community stood by Sri Lanka at the worst of times with a steady supply of arms and ammunition in the battle fronts. And, the moral support they extended in the international arena is incomparable. Now, battling in the economic fronts, Chinas assistance towards uplifting our economy is invaluable, Power and Energy Minister John Senevirathna said paying a special tribute to the Chinese delegation who accompanied him at the announcement of the inauguration of Phase II and Phase III of the Norochchalai Coal Power Project.
At end of the press conference announcing the inauguration, the Minister paid a special tribute to China at the sidelines of the event. Phase II of the project consists of two 300 MW power generation units adding a total of 600 MW in the national power grid. This is at a cost of US$ 891 million and includes a pier and a jetty for ships offloading coal. At the end of Phase II, pylons and power transmission lines will be extended up to Anuradhapura substation. And, a modern housing complex with all facilities will be built for the employees at the power plant.
Exim Bank of China has released the required investment, US $ 891 million, by way of a preferential loan. According to agreements signed by Sri Lanka and China governments, the 100% loan is payable within 20 years at a minimum interest rate of 2%. Compared with the usual commercial loans, at this minimal interest rate, Sri Lanka saves around US$ 479 million for the coming 20 years. The return on investment (ROI) of this project is estimated to be around 25%.
Power at cheap rates is the hallmark of the project. Norochchalai Coal Power Plant will generate electricity at a cost of Rs 8.00 per unit. When comparing with the unit cost of Rs 14.50 under diesel power generators, this is a dramatic drop in prices. Moreover, Ceylon Electricity Board generates electricity at a cost of Rs 14.00 and sells electricity at Rs 13.00 per unit. Ceylon Electricity Board is already at a loss. This is a crucial point. The new power plant will make Ceylon Electricity Board a profit earning institution with the completion of the project.
Most importantly, as a result of friendly negotiations, the Chinese government accepted an all inclusive price and hence the CMEC, the company in charge of constructions, will bear the inflation factor and exchange risk. As in usual agreements, Sri Lanka was not forced to agree to a formula where the SL government would have had to take the exchange and the inflation risk like other contracts.
Yearly consumption of coal for the project will be 770,000 metric tons of coal. The 115 km long road from Kalpitiya to Veyangoda, the transmission route, will be constructed under phase I, and it will be extended to Anuradhapura in phase II. As a whole, Norochchalai Coal Power Project will be a massive construction set up under Mahinda Chinthana. SL government got US$ 1346 million in aids and it will become history as the biggest investment project set up during the past three years.(JS)
At end of the press conference announcing the inauguration, the Minister paid a special tribute to China at the sidelines of the event. Phase II of the project consists of two 300 MW power generation units adding a total of 600 MW in the national power grid. This is at a cost of US$ 891 million and includes a pier and a jetty for ships offloading coal. At the end of Phase II, pylons and power transmission lines will be extended up to Anuradhapura substation. And, a modern housing complex with all facilities will be built for the employees at the power plant.
Exim Bank of China has released the required investment, US $ 891 million, by way of a preferential loan. According to agreements signed by Sri Lanka and China governments, the 100% loan is payable within 20 years at a minimum interest rate of 2%. Compared with the usual commercial loans, at this minimal interest rate, Sri Lanka saves around US$ 479 million for the coming 20 years. The return on investment (ROI) of this project is estimated to be around 25%.
Power at cheap rates is the hallmark of the project. Norochchalai Coal Power Plant will generate electricity at a cost of Rs 8.00 per unit. When comparing with the unit cost of Rs 14.50 under diesel power generators, this is a dramatic drop in prices. Moreover, Ceylon Electricity Board generates electricity at a cost of Rs 14.00 and sells electricity at Rs 13.00 per unit. Ceylon Electricity Board is already at a loss. This is a crucial point. The new power plant will make Ceylon Electricity Board a profit earning institution with the completion of the project.
Most importantly, as a result of friendly negotiations, the Chinese government accepted an all inclusive price and hence the CMEC, the company in charge of constructions, will bear the inflation factor and exchange risk. As in usual agreements, Sri Lanka was not forced to agree to a formula where the SL government would have had to take the exchange and the inflation risk like other contracts.
Yearly consumption of coal for the project will be 770,000 metric tons of coal. The 115 km long road from Kalpitiya to Veyangoda, the transmission route, will be constructed under phase I, and it will be extended to Anuradhapura in phase II. As a whole, Norochchalai Coal Power Project will be a massive construction set up under Mahinda Chinthana. SL government got US$ 1346 million in aids and it will become history as the biggest investment project set up during the past three years.(JS)
