BOI signs $ 600-mn FDI for Kerawalapitiya power plant

Colombo: A US$ 600 million agreement was signed by the BOI with Lanka Alokha AB to set up a 488 MW gas power plant at Kerawalapitiya.

Dhammika Perera, Chairman/ Director General of the BOI and H.M. Nawaratne, Director, Lanka Alokha AB (Pvt) Ltd signed the BOI Certificate of Registrations.

Minister of Enterprise Development and Investment Promotion and Minister of Mass Media and Information Anura Priyadharshana Yapa presented the BOI Agreement to the investor.

The Kerawalapitiya power plant is sponsored by Lanka Aloka AB (Pvt) Ltd with ARC Development International, Australia as the foreign investor, which is headed by Paul McMahon as Chairman.

The first stage of the project, which has been approved by the BOI, will bring US$ 600 million in Foreign Direct Investment. The project is for a 1000 MW power generation plant that is described as a Clean Development Mechanism (CDM) as defined in Article 12 of the Kyoto Protocol. The first stage of the 488 MW power plant is ready to commence construction. The power plant will create 50 new skilled employment opportunities.

The plant will use feedstock Liquefied Natural Gas for the first time in Sri Lanka. Gas is liquefied to ease storage and transport and then regasified before it is actually used. When the process of liquefaction is effected dust, water and heavy carbons are removed.

LNG is extremely environment friendly as it is odourless, colourless, and non-toxic and does not pollute land or water. Lanka Alokha will construct an LNG terminal, a regasification unit and storage facilities.

The Kerawalapitiya power plant is in the High Security Zone. Once it is operational it will become the cheapest power producer among Independent Power Projects (IPPs) in operation under the CEB, offering the lowest price for power. This would be a significant saving for the Ceylon Electricity Board as only the energy charge will be paid and there is no cost for the capacity charge.