Sri Lanka’s power utility makes profits with better rainfall, coal power
ECONOMYNEXT – Sri Lanka’s state-run Ceylon Electricity Board has posted profits of 13.7 billion rupees in the first four months of 2015, with better rainfall driving up hydro generation and coal power also increasing its share, the finance ministry said.
The generation cost had fallen to 12.53 rupees per unit (kiloWatt hour) in the first four months of the year from 20.15 rupees a year earlier.
Hydro generation was up 27.6 percent and coal power was up 43.4 percent. Large hydro and Coal are among the cheapest sources of power. The most expensive are renewables like wind, solar and liquid fuels.
Purchases from independent power producers were down 6.2 percent. CEB had reduced obligations to IPPs by 3.0 billion rupees. Bank liabilities had been cut by 4.0 billion rupees to 50.8 billion rupees.
A tax-payer bailout of has helped strengthen net assets of the firm, the Treasury said.
The tax-payer is expected to inject 170 billion rupees to the power utility. CEB is estimated to have made an operating loss of 13.3 billion rupees in 2014.
In 2011 the CEB made large losses due to a drought and the power ministry did not raise prices. The credit funded losses then triggered a balance of payments crisis, which sent the rupee down from 110 to 130 to the US dollar.
The crisis was fixed with a hike in interest rates and power and fuel tariffs.
Sri Lanka is now facing balance of payments pressure from a hike is state salaries and subsidies.