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
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