The Ceylon Electricity Board (CEB) and NTPC on Tuesday signed a joint venture and shareholder agreement here to set up a 500-MW (2 x 250 MW) coal-based power plant at Sampur in East Sri Lanka at an investment of $700 million. This will be NTPC's first overseas venture.
The agreement was signed by NTPC Chairman and Managing Director Arup Roy Choudhury and CEB Chairman Wimaladharama Abeywickreme in the presence of Indian High Commissioner to Sri Lanka Ashok K. Kantha.
A joint venture company will be incorporated in Sri Lanka with equal equity (50:50) contributions by NTPC and CEB for implementation of the project. The joint venture company upon incorporation will sign other agreements, including the power purchase agreement, shortly. Speaking at the signing ceremony, Mr. Kantha said, “I am hoping that they (NTPC) begin work by the middle of next year.” He hoped that the power project would go on stream by the first half of 2016.
Allaying apprehensions that the power generated here would be transmitted to India, he said there was no such move.
Sri Lanka needed to augment its energy as it embarked on a higher growth trajectory and India was aiding this process. The power was for Sri Lanka's consumption; to aid its growth.
India will offer a concessionary line of credit of $200 million to Sri Lanka to fulfil its commitment under the implementation of agreement, including that of construction of jetty at Sampur and of transmission lines from Sampur to Habarana.
The capacity of the project may be enhanced by another 500 MW in future.
The memorandum of agreement for the project was signed in December, 2006. When Sri Lankan President Mahinda Rajapaksa visited India in June, 2010, the progress on discussions on various agreements pertaining to the power project was reviewed and it was agreed that the parties concerned would expeditiously complete discussion on the agreements so that work on the power project could commence without delay. P. Uma Shankar, Secretary (Power), Government of India, said the agreement was a historic occasion.
Mr. Choudhury said NTPC would bring the best practices during the implementation of the project.
The first meeting of the steering committee of the two sides to iron out differences and firm up plans was held.
