Cabinet approves Sampur coal factory deal with India

Cabinet has approved a USD 500 million coal power plant in the former war torn eastern province, a minister said yesterday.

On a proposal made by Economic Development Minister Basil Rajapaksa, the Cabinet decided to recognise the 500 MW capacity coal power project at Sampur in the once war torn eastern province as a Strategic Development Project.

Due to the increased demand for electricity in the Eastern Province, it has been decided to establish a Coal Based Power Plant at a total investment of around USD 500 million.

The entire project will be funded by the government of India and agreements were signed during a recent tour of External Affairs Minister S. Krishna to Sri Lanka, Cabinet spokesman Minister Keheliya Rambukwella said. 

The joint venture partners for this project are the Ceylon Electricity Board and the National Thermal Power Corporation Ltd. of India.

The Cabinet approved deal will now be presented before parliament. China has also funded another coal power plant in the north-western part of the country. The first 300MW stage of the plant was completed last year. On Tuesday India and Sri Lanka signed bilateral deals worth over USD 703 million, largely involving financial assistance boosting housing, railway and water supply among other areas.  A Line of Credit Agreement of USD 382.37 million for the restoration of Northern Railway Services was signed to link the former war zone with the south.  The two countries also signed a Buyer’s Credit Agreement for USD 60.69 million for financing a water supply project for supply project in the north central region that will provide pipe borne water to thousands.

Two MoU’s were also signed for agricultural and telecommunication cooperation.