September 08, 2008

NTPC to ink JV agreement for Sri Lankan project in April 2008

BL reported that National Thermal Power Corporation and Ceylon Electricity Board are likely to sign a 50:50 JV agreement for the proposed 500 MW power project in Sri Lanka by April 2008. The project costs USD 500 million.

India and Sri Lanka, agreeing on a timetable for the delayed project, have targeted to begin work on a feasibility report in April 2008, followed by signing of the power purchase agreement in August 2008. The main plant contract will be awarded in June 2009. The first of the 2 units of 125 MW each will be commissioned by April 2012, followed by the second in July 2012.

It may be noted that the project, for which the agreement signed in December 2006, was delayed due to India's disagreement to the proposed location. Sri Lankan government had initially proposed to set up the project at Sampur, a town it had captured in September 2006. The project is now likely to come up at Veloor in Trincomalee district of eastern Sri Lanka. There is still some uncertainty over the location of the jetty that will handle imported coal.

For NTPC, the Sri Lankan project will be a step towards its globalization drive. It is also considering projects in Nigeria.