Due to the severe financial problem being faced by the Ceylon Electricity Board due to the increase of cost in generating power, the government is having discussions with the Chinese company that built the Norochchalai Coat Power Plant to vest it with that company, according to CEB sources.
The government has taken a bank loan amounting to 1350 Million U.S.Dollars for the Norochchalai Coat Power Plant project from the Exim Bank of China. The government hopes to vest the Power Plant to the Chinese company C.M.C.E which built it in lieu of the loan repayment.
The Electricity Board has presented two options to the government as a solution to the financial problem it is being faced due to the increase of cost in generating power.
The first option is to increase electricity charges and the second option is to vest the Power Plant to the Chinese company. The sources further states that much attention of the government is focused on the second option.
The Norochchalai Coat Power Plant project is targeted to produce 900 megawatts of power and it will be produced as 300 MW under the first stage and another 600 MW under the second stage. Construction work of the first stage of the project started in May 2007 and the Exim Bank of China has provided loans of 450 Million U.S.Dollars for the first stage of the project and 900 Million U.S.Dollars for the second stage of the project.
The Chinese Exim Bank has provided these loans at 2% interest and under the condition of repaying the loan amount in a period of 20 years. The former Minister of Power and Energy was against the vesting of the Norochchalai Coat Power Plant to China and there were media reports saying that this issue also contributed for his removal from the Power portfolio.
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