Sri Lanka and coal

From Global Energy Monitor

Sri Lanka, which has no domestic coal production, is looking to rapidly expand coal-fired power generation.

Coal production

Both the U.S. Geological Survey and the International Energy Agency list Sri Lanka as having no domestic coal production.[1][2]

Coal imports

The International Energy Agency states that in 2011 - the most recent year that data is available for - Sri Lanka imported 760,000 tonnes of coal of which 395,000 tonnes was burned for electricity production.[2]

In October 2012 the Sri Lanka power minister Champika Ranawaka told Parliament that the first 300 MW unit of the Norochcholai Power plant would use between 650,000 to 700,000 tonnes of coal a year.[3]

Coal for the plant is supplied through Lanka Coal (Pvt) Ltd, a government-owned company. However, Lanka Coal put the supply of coal for the power plant out to tender and received two bids: one from Holcim, which operates cement plants which it already imports coal for, and another from Nobel Resources[3], a company owned by casino businessman Ravi Wijeratne. (Wijeratne is a major partner in James Packer’s Colombo Crown casino.)[4]

Ranawaka told parliament that at first Holcim Trading (Pvt) Ltd had been awarded the contract but that this was overturned in favour of Nobel Resources following an appeal to cabinet. It was reported that Holcim had bid US$58.763 million and Nobel Resources US$58.736 million to supply 325,839 tonnes.[3]

Member of Parliament Dayasiri Jayasekera told parliament that Holcim's bid included the cost of coal landed at the jetty - including the costs of barge transport from the coal carriers while Nobel's excluded the costs of barging. Power Minister Ranawaka stated that Lanka Coal had already bought a barge which would be operated by the government-owned Ceylon Shipping Corporation a state-run firm. However, he said that in future tenders the cost of barging operations would be included.[3]

In November 2013 it was reported that the Power and Energy Ministry had undertaken a tender process. While the lowest bidder was from The controversy over the awarding of the coal contract provided the impetus for the government to consider direct investment in a coal mine.[4]

Electricity generation

In 2011 - the year most recent IEA data is available for - 50% of Sri Lanka's power generation was based on imported oil-fired generation with hydro accounting for 40% and coal 9%. Solar photovoltaics accounted for just 0.1% and wind 0.7%. The total amount of electricity generated was 11,646 gigawatt hours.[2]

Proposed coal-fired power stations

Sampur power station

Sampur power station, a 500 megawatt (MW) coal-fired power station which has been proposed to be constructed at Sampur, Trincomalee in Sri Lanka. The project would be developed through a joint venture company between the the National Thermal Power Corporation (NTPC) and the Ceylon Electricity Board."[5]

Lakvijaya Power Plant

Lakvijaya Power Plant is an existing 600 megawatt coal-fired power station in the Puttalam District of the Northwestern Province in Sri Lanka. It was Sri Lanka's first coal power plant. The existing plant comprise two 300 MW generatinh units with a third inder construction and scheduled for commissioning in late 2014.

The Chinese government thorough the Export-Import Bank of China provided US$455 million for the Lakvijaya plant. The delivery of the first shipment of 65,500 MT of coal at a cost of US$7 million from Indonesia was expected in the first week of November 2010.[6]

The first unit was commissioned in late March 2011. Under Phase One of the project, 300 MW, which amounted to 17% of the national power requirement of the country, was be added to the country's National Grid.[7]

In August 2011, the Export-Import Bank of China offered an $891 million loan to build the second phase of 600 MW.[8]

Japan offers $600 million loan for Southern province power station

In March 2013 it was reported that the Ceylon Electricity Board (CEB) was planning a 500 MW coal-fired power station at Ahuruwella near Induruwa on the south west coast with assistance from Japan. The news report stated that "the plant would use eco-friendly technology and funding is expected from Japan. Industry sources say funding has been requested from Japan but no decision has been made." [9]

In May 2013 the Chairman of the CEB, W.P. Ganegala, announced that a 500 MW coal-fired power station costing approximately $US500 million would be established in the Southern Province at a location yet to be decided. However, this seems likely to be referring to the Ahuruwella proposal. The Sunday Times stated that while surveys were underway a location had not been selected. Ganegala stated that during a visit to Japan by Sri Lankan President Mahinda Rajapaksa in March 2013 the Japanese government had offered to assist with the project. Ganegala stated that it was expected that work on the plant would begin in late 2013 and take 18 months.[10]

In June 2013 Reuters reported discussion between Sri Lanka and the Japan International Cooperation Agency (JICA) for a $600 million loan to fund a 600 MW coal plant. The next step would be a visit to Sri Lanka by a Japanese team to begin a feasibility assessment.[11]

Coal transport

Sri Lanka has signed a $450 million deal with China Merchants Holdings and Sri Lanka's Aitken Spence to boost Sri Lanka Colombo port's cargo-handling capacity.[8]

China has also lent $400 million for the first phase of the proposed Hambantota Port.[8]

Relations with China

China was Sri Lanka's largest lender in 2009 and 2010, giving $1.2 billion and $821 million respectively. In 2009, that figure accounted for 54 percent of total foreign loans, and 25 percent in 2010. In the first six months of 2011, trade between China and Sri Lanka was worth $1.28 billion; only $68 million of that was exports from Sri Lanka to China.[8]

China Development Bank Corporation has agreed to provide $1.5 billion by 2015 for construction of roads, bridges, power plants and water and irrigation schemes in Sri Lanka. China's Exim Bank has committed $102.5 million for Sri Lanka to buy 13 new diesel engines for its railways. The engines will come from Chinese manufacturers.[8]

Articles and resources


  1. Chin S. Kuo, The Mineral Industry of Sri Lanka, U.S. Geological Survey, November 2013.
  2. 2.0 2.1 2.2 International Energy Agency, "Sri Lanka: Coal and Peat 2011", International Energy Agency, accessed September 2, 2014.
  3. 3.0 3.1 3.2 3.3 "Sri Lanka power plant to use up to 700,000 tonnes of coal a year", Lanka Business Online, October 17, 2012.
  4. 4.0 4.1 "SL considers investments in foreign coal mines", Sunday Times, November 03, 2013.
  5. National Thermal Power Corporation, "Announcements 2006-07", National Thermal Power Corporation website, accessed June 2010.
  6. Shirajiv Sirimane, "Two major development projects from November", Sunday Observer, October 24, 2010.
  7. "First phase of Sri Lanka's first coal power plant to be opened tomorrow" 'ColomboPage', March 21, 2011.
  8. 8.0 8.1 8.2 8.3 8.4 "Factbox: China-Sri Lanka economic ties" Reuters, Aug. 9, 2011.
  9. " Sri Lanka plans 500MW coal plant in South West", Lanka Business Online, March 21, 2013.
  10. "Japan to build coal-power plant in south", The Sunday Times, May 26, 2013.
  11. "Sri Lanka in talks on $600 mln Japan loan for coal power plant," Reuters, June 7, 2013

Related SourceWatch articles

External resources

External articles