Sri Lanka cancels hundreds of mini-hydro deals, 190MW to be re-tendered

ECONOMYNEXT – Sri Lanka has cancelled 175 mini-hydro deals hurriedly signed before the Presidential elections and another 190 mega watts (MW) of plants held up without power purchase agreements which will be re-tendered, a minister said.

“Yesterday we decided to cancel 175 letters of intent (LOIs) given by the Sustainable Energy Authority shortly before the Presidential elections,” State Minister for Power Mahindanda Aluthgamage said.

Aluthgamage alleged that the LOIs were awarded to raise funds for elections.

He said another 190MW of renewable plants for which LOIS were awarded were stuck at the Sustainable Energy Authority for up to 5 years because the Ceylon Electricity Board refused to sign Power Purchase Agreements.

“The CEB did not sign because they were not awarded on competitive bidding,” Aluthgamage said.

“According to the CEB Act they have be competitively tendered. We have decided to cancel the 190MW and call for competitive bids.”

Sri Lanka’s state-run Ceylon Electricity Board is caught in both capacity and financial crises as a planned 500MW coal plant was cancelled by the last administration, and no tariff hike was given as the rupee collapsed due to liquidity injections, which pushed up all costs including coal.

A 300MW LNG capable diesel plant tender, which would have solved the capacity crisis has ended up in court. (Colombo/Jan29/2020)

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