ADB powers up US$ 120 m loan

Tuesday, 21 June 2011 00:53 - - {{hitsCtrl.values.hits}}

Energised by post-war development the Asian Development Bank (ADB) yesterday announced a loan of US$ 120 million (Rs. 13 billion) to boost the sustainable power sector and achieve the Government’s goal of providing electricity to all households by next year.

This comes in the wake of the Finance Ministry recording the highest ever contribution from development partners of US$ 3.2 billion in its 2010 Annual Report. Releasing a statement the ADB noted that it has agreed to provide financial assistance of US$ 120 million for the implementation of Sustainable Power Sector Support Project in Sri Lanka in line with the Government’s target of providing electricity to all households by end of 2012.

“The project will contribute to a reliable, adequate and affordable power supply for balanced and sustainable economic growth in Sri Lanka and increase electricity connections in rural areas, specifically in the Eastern, North Central, Southern and Uva Provinces,” the statement said.

The total investment cost of the project is US$ 162.03 million (Rs. 17,553 million) of which US$ 42.03 million (Rs. 4,553 million) will be provided by the Government of Sri Lanka.

The total loan from the ADB includes a loan of US$ 10 million (Rs. 1,083 million) from the Asian Development Fund (ADF) and a loan of US$ 110 million (Rs 11,917 million) from Ordinary Capital Resources (OCR).

The project will cover construction of substations at Galle, Polonnaruwa, Vavunathivu and Moneragala, building of transmission lines from Ambalangoda to Galle, Mahiyangana to Vavunativu (via Ampara), Moneragala to Madagama and stringing of second circuit of existing transmission line from Kotmale to Anuradhapura.

It will also improve the distribution system covering 486 rural electrification schemes to electrify about 12,190 households in 113 remote villages in Ampara District. Moreover the distribution system in Haldummulla, Diyatalawa and Koslanda areas in Uva Province will be strengthened.

Funds will also facilitate private developers and plantation estates to rehabilitate and connect their micro hydro plants to the main grid on net metering basis along with installation of capacitor banks for transmission loss reduction at Aniyakanda, Ambalangoda and Katunayake substations. The loan will include preparation of a detailed engineering design of 26.5 MW hydro power station at Moragolla in the Kandy District.

“Financing of rehabilitation of the micro hydro power plants will be carried out through a credit line. The credit line would be open to estate plantation companies and private sector developers who wish to connect their micro hydro power plants to main grid on the basis of a net metering agreement.”

The Ceylon Electricity Board (CEB) and Sustainable Energy Authority (SEA), under the Ministry of Power and Energy will be the project implementing agencies. The project is scheduled to be completed by 30 April 2014.