The Kerawalapitiya power-generation project which is the second largest thermal combined cycle power plant is sponsored by Lanka Aloka AB (Pvt) Limited. Arc Developments International (Pvt) Limited is an Australian registered company and the major partner in Lanka Aloka.

The Kerawalapitiya Power project which will generate 1000 MW will be developed by two stages each of approximately 500 MW. This project will avert the looming power crisis expected, the Power and Energy Minister W.D.J.Seneviratne said at the ceremony held to cut the first sod of soil at Kerawalapitiya power plant construction recently.

Minister Seneviratne addressing the participants said that the 500 MW stage 1 of the power project would add 20 per cent additional capacity to the current Sri Lankan electricity generation capability, providing much needed supply to the Sri Lankan electricity system. The Plant would be the cheapest power producer among the current IPPs contracted to the CEB and would assist in the economic growth of Sri Lanka providing cost-effective electricity to the residential and industrial users across the country.

He pointed out that the Kerawalapitiya plant would be operated by liquid natural gas (LNG) and the project would include the development of an LNG storage and regasification facility. This would be the first LNG import facility developed in Sri Lanka. The responsibility of the Ministry was to ensure this facility was constructed with sufficient capacity to service the requirements of the power station and in addition the requirements of industry and the wider community who was identified as able to utilize this clean source of energy. This energy source was odourless, clourless and would not pollute land or water.

Minister Seneviratne added that due to its low impact on the environment and recognition as a clean energy technology, this 1000 MW LNG fuelled combined cycle gas turbine power generation project would be developed as a Clean Development Mechanism (CDM) project as defined in Article 12 of the Kyoto Protocol. This project would be funded by Foreign Direct Investment with an initial investment of approximately US $ 600 million for the stage one power plant and had obtained 25 years status with the Board of Investment.