Norochcholai stages II, III to begin
On completion project will provide 900 MW power:
Sri Lanka entered into agreement with the Chinese Government
yesterday to commence the second and third phases of the Norochcholai
coal power project which is aimed at generating over 600MW.
The Exim Bank of China has provided a loan of US$ 891 million for the
second and third phases of the project which will begin in October.
This loan is repayable in 20 years at two percent interest.
Ceylon Electricity Board Chairman E.A.S.K. Edirisinghe and President
of the China National Machinery and Equipment Import and Export
Corporation (CMEC) Jia Zhiqiang signed the agreement on behalf of the
two Governments in the presence of President Mahinda Rajapaksa, Power
and Energy Minister John Seneviratne and Chinese Ambassador in Sri Lanka
Yang Xiuping .
The Chinese Government agreed to provide financial assistance to the
country’s biggest ever power generation project on a request by
President Mahinda Rajapaksa during his State visit to China in 2006.
The first phase of the project generating over 300MW is expected to
be completed by next year. The Chinese company which undertook the
construction has decided to complete the construction one year before it
was originally planned.
Power and Energy Minister John Seneviratne at a press conference held
at the Information Department said the first, second and third phases of
the project is expected to generate over 50 percent of the country’s
power requirement and power sector will see massive development with the
completion of this project.
The coal power project will halve the production cost of an
electricity unit and this will directly help boost the country’s
economy, he said. The Minister said the country’s daily power
requirement is 1800MW and this project will add 900MW to the National
He said the diesel power generation plants can be removed after this
project is completed by the Government. “The production cost of an
electricity unit is Rs. 14.50 but the CEB sells it to the public at Rs.
13.00 incurring a loss of Rs. 1.50 for every unit.
The production cost of an electricity unit can be brought down with
the completion of Norochcholai Coal power project. The diesel power
generation is very costly when compared with coal power generation.
He said the main objective of the project is to reduce the existing
electricity tariff which is the highest in the Asian region.
“Power supply to the Northern and Eastern areas will be expedited
with the completion of this project. We find it difficult to provide
electricity when there is drought and this situation will change after
this project is completed,” the Minister said.
Under Phases II and III of the project, a substation is expected to
be constructed at Chilaw and a transmission line will be extended from
Puttalam to Anuradhapura. Over 3000 youths in the area will get direct
and indirect employment opportunities due to this project.
The Minister said the families who were evacuated from the
construction site in Norochcholai have been provided fully equipped
houses . “We provided each family two acres of lands.
The infrastructure facilities in the area were developed, he said.
Addressing the media CMEC President Jia Zhiqiang said the Government and
the CEB has provided all assistance they required to complete Phase I
construction one year before it was scheduled to be completed.