ADB loans US$ 120mn to develop rural power generation

Credit line available for estates, private developers to connect mini-hydro power plants to grid


For more power...
Treasury Secretary Dr. P. B. Jayasundera (right) and Ms Candice McDeigan, Head, Portfolio Management Unit of the ADB Sri Lanka Resident Mission,ink the US$ 120 million loan agreement which would finance the rural power sector.

The Treasury on Monday (20) entered in to an agreement with the Asian Development Bank (ADB) for a US$ 120 million (approx. Rs. 13 billion) facility for the implementation of the ‘Sustainable Power Sector Support Project’ in Sri Lanka.

"The project will contribute to a reliable, adequate and affordable power supply for balanced and sustainable economic growth in Sri Lanka and increase electricity connections in rural areas, specifically in the Eastern, North Central, Southern and Uva Provinces," a joint statement issued by the ADB and Ministry of Finance and Planning said.

The total investment cost of the project is US$ 162.03 million (approx. Rs 17,553 million) of which US$ 42.03 million (Rs 4,553 million) will be provided by the government of Sri Lanka. The total loan from the ADB includes a loan of US$ 10 million (Rs 1,083 million) from the Asian Development Fund (ADF) and a loan of US$ 110 million (Rs 11,917 million) from Ordinary Capital Resources (OCR).

The funding will be used to for construction of substations at Galle, Pollonnaruwa, Vavunathivu and Monaragala and the construction of transmission lines from Ambalangoda to Galle, Mahiyangana to Vavunativu (via Ampara), Monaragala to Madagama and stringing of second circuit of existing transmission line from Kotmale to Anuradhapura.

The ADB facility would also be used to finance the improvement of the distribution system covering 486 rural electrification schemes to electrify about 12,190 households in 113 remote villages in Ampara district and also in strengthening the distribution systes in Haldummulla, Diyatalawa and Koslanda areas in Uva province.

An important aspect of the project is that it seeks the facilitation of private developers and plantation estates to rehabilitate and connect their micro hydro plants to the main grid on net metering basis and the installation of capacitor banks for transmission loss reduction at Aniyakanda, Ambalangoda and Katunayake substations.

The funds would also be used for the preparation of a detailed engineering design of a 26.5 MW hydro power station at Moragolla in the Kandy district.

Financing for the rehabilitation of micro hydro power plants will be carried out through a credit line. The credit line would be open to estate plantation companies and private sector developers who wish to connect their micro hydro power plants to main grid on the basis of a net metering agreement.

The Ceylon Electricity Board (CEB) and Sustainable Energy Authority (SEA), under the Ministry of Power and Energy will be the project implementing agencies. The project is scheduled to be completed by April 30, 2014.

Treasury Secretary Dr. P. B. Jayasundera and Ms Candice McDeigan, ADB Head Portfolio Management Unit of the Sri Lanka Resident Mission, signed the two loan agreements on Monday.

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