CEB looks to jump-start power sector

Wednesday, 24 June 2020 00:00 -     - {{hitsCtrl.values.hits}}



  • Plans to slash losses by Rs. 15 b in 2020, become profitable in four years 
  • Fast-tracks all delayed projects, faults former Govt. for failing to stick to generation plan  
  • Uma Oya, Mannar wind farm, Broadlands hydropower to come online in 2020 
  • 300MW LNG plant to begin construction, second to be tendered this year 
  • Denies CEB focused on coal, contends focus on renewables maintained 

By Uditha Jayasinghe   

After more than five years with no power plants added to the national grid, the Ceylon Electricity Board (CEB) yesterday assured that Sri Lanka’s power industry will get a much-needed jump-start this year,

CEB Chairman Eng. Vijitha Herath - Pic by Ruwan Walpola

with at least three power plants being completed and two other large scale power plants likely to kick off construction.

CEB Chairman Vijitha Herath told reporters the State power monopoly was charging ahead to complete several projects that had been delayed under the previous Government. He faulted the earlier administration for failing to follow the generation plan that was in place when the Government changed in 2015, and insisted that the failure to bring new power plants onto the grid was the main reason for the CEB’s large losses over the past four years. He pointed out that after Phase II and III of the Norochcholai power plant were brought online in 2014, the CEB made a profit in 2015, but promptly returned to its loss-making status a year later and remained in that position.   

“Last year the CEB loss was Rs. 85 billion, but this is largely due to past shortcomings. The previous Government failed to complete any new power plants, and as a result the CEB had no choice but to rely on costly thermal power generation. This escalated costs and increased CEB losses. However, under the present Government, the CEB is working to complete all the power projects that were delayed, and we are confident that with these new plants coming online we can reduce losses by at least Rs. 15 billion,” Herath said. 

Among the projects the CEB is working to complete this year is the controversial Uma Oya project, which will add 120MW to the grid. Herath was also optimistic that Sri Lanka’s largest wind-power project in Mannar, which is funded by the Asian Development Bank (ADB) at a cost of $ 134 million, will be completed by August and will add 100 MW. The Broadlands hydroelectricity venture is also expected to be completed in 2020 adding 35MW. The Moragolla hydropower project will be added to the grid in 2021. 

In addition to these, the CEB together with the Power and Energy Ministry is also working on awarding a 300MW LNG power project to Lakdhanavi Ltd. Cabinet approval for the project was given in February 2019 under the recommendation of former Power and Energy Minister Ravi Karunanayake. The project drew much controversy at the time with bidders contesting the award in court and the Procurement Appeals Board also recommending a different conglomerate to carry out the project. Subsequently Karunanayake received Cabinet approval to award a second LNG plant to Lakdhanavi sans a tender. The present Government decided to continue with the same company and was currently finalising the contracts, CEB officials said. The LNG plant will be built in Kerawalapitiya. 

The CEB is also in the midst of evaluating a 300MW extension to the Norochcholai power plant with Cabinet approval already given for the project. 

“It is not true to say that we are championing coal. The project has not been finalised yet and in addition to the first 300MW LNG plant, which we hope will begin construction this year and be completed by 2023, we will also be calling tenders for a second LNG power plant later this year. Once the first LNG plant comes online the thermal power plants will be converted to LNG and the overall cost of power production will reduce, along with CEB losses. We have already called for 150 MW of solar and will call for 150MW more in the near future. There is also a possibility that the wind-power project in Mannar can also be expanded, so we are very much in line with the Government’s policy to increase renewables,” Herath said. 

However, Herath acknowledged many of these plants will be structured as investments with the involvement of the private sector, rather than being on the CEB balance sheets. He also emphasised that with the wide range of new projects to be rolled out there was a better chance for the CEB to eventually become profitable. 

“I believe the CEB can be made profitable in four years. Already we are reducing our debt. The CEB was given Rs.50 billion by the special fund established to collect revenue from taxes imposed on fuel. The CEB used these funds to repay the Ceylon Petroleum Corporation (CPC) and the CPC in turn used it to repay loans they had taken from Bank of Ceylon. So there are many positives here and the public should move away from the viewpoint that the CEB is incompetent and corrupt.” 


No final decision yet on Norochcholai extension