Resolving all the outstanding issues, India and Sri Lanka will on Monday ink an agreement for the execution of the 500 MW thermal power project at Sampur in Trincomalee at a cost of Rs. 4,000 crore.

State-run NTPC and Ceylon Electricity Board (CEB) had signed an agreement in 2011 to set up a coal-based power project which had got delayed due to various reasons. About two years after the agreement was signed, the initiative — NTPC’s first overseas coal-fired power project — saw little progress due to various disagreements between the two partners.

The proposed signing of pacts for the Sri Lanka plant comes close on the heels of India and Bangladesh inaugurating two power projects on October 5 and reflect stronger regional co-operation in this sector. India’s External Affairs Minister, Salmaan Khurshid along with his Sri Lankan counterpart, G.L. Peiris are going to be present in Colombo when the agreement is signed on Monday. The agreements will be related to power purchase, land lease and coal supply.Electricity generated from the plant, which would have two units of 250 MW, would be supplied to CEB.

Coal for the project would be imported and supplied by Lanka Coal Company (LCC), while land would be given by the Sri Lankan government on a long term lease. Even though the agreement for the joint venture project was signed in late 2011, various differences between

NTPC and CEB had been delaying further progress. NTPC has an installed generation capacity of 41,184 MW.

The breakthrough came after both the sides held talks in New Delhi recently and decided to take up the project in right earnest. Both sides discussed and finalised the changes for the power purchase agreement (PPA) and the implementation agreement for the 2X250 MW project.