Hydropower Free Lanka expands operations

Friday, 27 May 2011 00:01 - - {{hitsCtrl.values.hits}}

A subsidiary company of Free Lanka Capital Holdings PLC, Hydropower Free Lanka PLC (HPFL) has joined the national effort to provide hydropower throughout the country. The company has already completed two mini-hydropower projects, started construction work on two more and is also finalising plans on others.

Incorporated in 2000, the company began operations by developing hydropower within the premises of Pussellawa Plantations Limited and Maturata Plantations Limited – the two plantation companies in the Group. Two plants have been successfully commissioned – one at Sanquhar Estate, Atabage and the other at Delta Estate, Pupuressa, each producing 1.6mw of hydropower.

The company has reported a very profitable fourth quarter ending on 31 March 2011 with a profit before tax of Rs. 22.14 million as against Rs. 2.3 million in the corresponding period last year (as per unaudited accounts).

The total profit before tax of Rs. 70.4 million has been recorded for the financial year 2010/11. It shows a decrease from Rs. 75.2 million profit made during the previous year. A company spokesman explained that the decrease was due to additional depreciation and expenses relating to the Initial Public Offering (IPO) during the year.

Discussing the company’s approach, a spokesman said that they were utilising assets available on their tea estates. “Both Maturata Plantations and Pussellawa Plantations have hydropower resources and we are expanding activities in those areas,” he said.

HPFL has now signed the Standard Power Purchase Agreement (SPPA) with the Ceylon Electricity Board (CEB) for two projects. Construction work on these – Thebuwana at Kuruwita and Stellenberg at Gampola – has already begun. Power generation is scheduled to start around March 2012.

Construction of two more projects at Ragala will commence soon and work is due to be completed by August 2012.

In addition to hydropower plants being constructed by HPFL, Free Lanka Capital Holdings (FLCH) will also set up seven more hydropower plants in Deniyaya and Rakwana. By the end of 2013, the Group expects to generate a total of 16.02mw of power to the national grid.

Explaining the company’s rationale in moving on to hydropower sector, the HPFL spokesman said that they were guided by the Government policy of developing the hydropower generation potential of the country to its full potential as it was a major indigenous resource for power generation.

During the past decade, the country’s electricity demand reports an average annual growth of 7% to 8%. This is expected to increase with the post-war boom in the industrial sector and given the Government’s continuing sound infrastructure development programmes, mainly to enhance the living standards of the society.

It has been estimated that 95% of electrification will be achieved by 2015 with a mix of grid and off grid systems.