COLOMBO, June 7 Sri Lanka is in discussion with
Japan about a $600 million loan to fund the construction of a
600 MW coal power plant, the power ministry secretary told
Reuters on Friday, as the island nation aims to lower power
Sri Lanka raised its electricity tariff sharply in April in
as part of efforts to reduce losses at the state-run power
company. Extended droughts have cut hydro power generation and
forced it to use more expensive oil.
"We are considering a super critical coal power plant which
produces no ash and smoke. We have had discussions with the
Japanese government and JICA (Japan International Cooperation
Agency)," Power and Energy Ministry Secretary M.M.C. Ferdinando
Super critical refers to the latest generation of coal-fired
power plants which are more efficient than conventional designs.
"The cost is estimated at $600 million. This will be from a
40-year concessional loan. We have proposed a 600 MW capacity
plant. But all will be decided after the feasibility study."
Ferdinando said a Japanese team is scheduled to visit Sri
Lanka for the feasibility assessment in two weeks.
He said the new plant was expected to be built in the south,
which is a popular tourist destination: "We want to emulate
plants in Japan where there are tourist hotels above the coal
The government is caught between trying to keep power prices
in check and helping the state-run electricity board, which
officials expect to post a loss of roughly $355 million this
The use of coal is cheaper than natural gas for generating
electricity and Sri Lanka has built a 300 MW coal plant with a
$455 million loan from China's Exim Bank in the northwestern
coastal town of Norochcholai.
The bank has loaned a further $891 million to expand the
plant to a generation capacity of 900 MW.
India's National Thermal Power Corporation and Sri
Lanka's state-run electricity board are also in talks regarding
construction of a 500 MW coal power plant on the east coast.
(Reporting by Shihar Aneez; editing by Jason Neely)