The Ceylon Electricity Board (CEB) is in the final stage of negotiating a $ 50 million loan from Beijing-based Asian Infrastructure Investment Bank (AIIB) for a major power project which was abandoned by Japan, following the Government’s cancellation of the Colombo Light Rail Transit (LRT) Project.
The project is the urgently needed “Greater Colombo Transmission and Distribution Loss Reduction Project Phase II”, and CEB Chairman Eng. Vijitha Herath told The Sunday Morning on Friday (04) that he is confident the discussions would be finalised soon and the project would commence as soon funds are mobilised. He expects construction to be completed within two years.
Funding for the project was halted by the Japan International Co-operation Agency (JICA), a Japanese governmental agency that delivers the bulk of official development assistance for the Government of Japan. AIIB, on the other hand, is a multilateral development bank headquartered in Beijing. It began operations in January 2015 and now has 103 approved members worldwide.
The LRT Project was controversially cancelled by the Cabinet recently, claiming that it was costly, while transport experts claimed the total project would cost only around $ 1 billion, which, as per the international cost estimates, is the average cost for the construction of an LRT.
The consequent stoppage of funding for the Greater Colombo Transmission project led to fears of a power shortage emerging due to the lack of infrastructure to transmit the power generated at the plants.
On 27 November, a senior engineer attached to the CEB told The Sunday Morning, on the condition of anonymity, that the existing transmission capacity from Kerawalapitiya to Colombo is only 300 MW, and even if more power plants are built in the country with the intention of meeting the ever-increasing electricity demand, or even if the authorities opt for emergency purchases, the existing electricity transmission line capacity would not allow any additional electricity transmission.
The main impediment, as explained by the senior engineer, is the sudden halting of the Greater Colombo Transmission and Distribution Loss Reduction Project Phase II, which had been finalised and at the implementation stage.
Responding to the allegations levelled by the senior engineer, CEB Chairman Eng. Herath said that by the time the construction of LNG (liquefied natural gas) power plants is completed and operations commenced, the transmission line would also be ready and therefore, there wouldn’t be any such issue in transmitting electricity generated in Kerawalapitiya.
The CEB Chairman also noted that in any case the loan with AIIB would not work out, the CEB would go for a domestic loan of around Rs. 10 billion, which could easily be obtained from state banks.
However, The Sunday Morning earlier learnt that following the cancellation of the Japanese funding for the transmission project, the CEB was seeking funding from local banks in order to proceed with the project but was not successful in finalising funding partners.
It is expected that 200 MW would be added to the national grid by 2022 via the 300 MW Lakdhanavi LNG power plant which is to be built in Kerawalapitiya, and that the remaining 100 MW would be added by 2023.
As explained in the CEB’s Long Term Generation Expansion Plan (LTGEP 2015-2034), natural gas-fired combined cycle power plants and associated LNG import infrastructure, along with two 300 MW dual-fuel combined cycle power plants, are to be commissioned in the western region by 2022.
The associated LNG importing infrastructure is to be developed on a fast-track basis with sufficient capacity to cater to both the new power plants and the conversion of other oil-fired combined cycle power plants in the western region.
Furthermore, an additional three 300 MW natural gas-fired combined cycle power plants are expected to be commissioned by 2026, in either Kerawalapitiya or Hambantota. Accordingly, the incorporation of LNG-fired power plants to the Sri Lankan power system was considered in the LTGEP 2015-2034.
Courtesy: The Morning