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Chinese funds for Puttalam Coal Power project

The Government of China through the Export Import Bank of China has agreed to provide a credit package in a total sum of US $ 455 million for the implementation of the proposed Puttalam Coal Power project.

Out of the total credit package, US $ 300 million has been provided as a concession under a Preferential Buyer’s Credit Agreement, while the balance of US $ 155 million is provided under a Buyer’s Credit Agreement.

Considering the national importance to meet the growing electricity demand in the country at a minimum cost to the economy by reducing the heavy reliance on thermal power generation as at present, the Government accorded high priority to the Puttalam Coal Power project.

The proposed power plant will be built in three phases of 300 MW capacities, each up to the final plant capacity of 900 MW. The proceeds of the credit will be utilized to implement Phase I of the power plant which includes installation of a 300 MW Coal Power Plant at Norochcholai, all the auxiliary equipment and systems, including a coal unloading jetty, a 115 km power generation line and other infrastructure facilities. The proposed project will be operated as one of the base load plants with the capacity of operating at partial loads when required, utilizing coal as the source of fuel for power generation.

This project, which is considered as an important milestone in the country’s energy sector development programme, will help to achieve a better diversification of sources of energy used in the power generation.

The total cost of the project, including the necessary infrastructure such as transmission lines and jetty facilities, is estimated at US $ 455 million. The weighted average interest rate of the total loan amount of US $ 455 million is approximately 3.5 per cent per annum with a 15 to 20 year repayment period, including a grace period of five years.

The loan agreement was signed by the Ministry of Finance and Planning Secretary Dr. P. B. Jayasundera, and Export Import Bank of China Assistant General Manager Li Yong yesterday.

 

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