LBO reported that Sri Lanka's state run Ceylon Electricity Board is in the final stage of discussions with India's National Thermal Power Corporation to build a 500 MW coal plant.

Mr Anura Senaka Wijayapala deputy chairman of Sri Lanka's Ceylon Electricity Board said that "We are in final stage of discussion. We hope to sign the final agreements within a month or two. We hope to begin construction by the end of 2012 and issue tenders to buy equipment."

The coal plant will be 50/50 JV with CEB and NTPC. Each partner will contribute USD 75 million in equity for the USD 500 million plant in Sampur, in Sri Lanka's north eastern port city of Trincomalee. Related facilities of a jetty to unload coal and infrastructure to take off power are expected cost another USD 200 million officials.

In September 2011 a shareholder agreement was signed.

At the time Indian officials said that they planned reach financial closure in two months. India is giving USD 200 million soft loan to Sri Lanka for the power project. CEB is cash strapped and running heavy losses.

Initial cabinet approval for the joint venture was given as far back as in March 2006, when Sri Lanka's East coast was still a war zone in a 30 year war which ended in May 2009. Then there were delays over site selection. There have been concerns that due to delays the plant will not be able to be up and running by 2017.

Source - Lanka Business Online.com

(www.coalguru.com)