Landmark 100 MW solar project by WindForce, Lakdhanavi, and The Blue Circle to shape SL’s future power pricing

• Power Purchase Agreement with CEB set to be signed by Oct.30 with tariffs in US dollars but payable in rupees
• Consortium confident of offering competitive tariff to CEB influencing future large-scale renewable projects
• The Blue Circle holds 40% equity stake of the project, while WindForce and Lakdhanavi share the remaining 60%
• The US$152mn project includes a 70% debt component and is scheduled for financial closure by January 24, 2024

From left: WindForce CEO Lasitha Wimalaratne, Managing Director Manjula Perera, Lakdhanavi Director/CEO M.J.M.N Marikkar and The Blue Circle CEO/Co-founder Olivier Duguet.
Pic by Kithsiri De Mel

By Indika Sakalasooriya

The 100 MW solar power generation project undertaken by the consortium comprising WindForce PLC, Lakdhanavi, and Singapore’s The Blue Circle, is set to become a significant milestone in Sri Lanka’s power sector as it aims to establish benchmark pricing for upcoming power generation ventures conducted by the private sector.

“With this project, two Sri Lankan companies with the support of a leading global renewable energy player will be able to set a benchmark price for large-scale renewable energy projects, specially solar power,” Lakdhanavi Director/CEO M.J.M.N. Marikkar told a press briefing held yesterday in Colombo, where representatives from WindForce and Blue Circle were also present.

“We are confident that we could give a very competitive tariff to the Ceylon Electricity Board. 

Whoever going to come with bigger numbers, bigger megawatts, will have some benchmark price to follow,” he added.

The Power Purchase Agreement (PPA) between the consortium and the Ceylon Electricity Board (CEB) is expected to be signed by October 30, 2023. The tariff will be denominated in US dollars but will be paid in rupees.

As Sri Lanka has set an ambitious target to increase the contribution of renewable energy in power generation from the current 50 percent to 70 percent by 2030 by adding about 5, 000 MW to the grid, a number of new renewable energy projects are believed to be in the pipeline.

India’s Adani group has already entered into a deal with Sri Lankan authorities to set up wind power plants in the country’s northern and eastern parts with a combined capacity of 350 MW with an investment of US$ 442 million.

Meanwhile, the consortium’s project also stands out within Sri Lanka’s energy sector given its all-inclusive nature, as for the first time in CEB’s history, the transmission system is handled by the project company and not CEB.

The power project, which will be located at Siyambalanduwa in the Monaragala district, will be delivered as a comprehensive package, incorporating a 100 MW solar power plant, a 12MWh battery storage system, a grid substation, and a 27km transmission line.

Marikkar stated that the accelerated tender process carried out by the CEB for the project serves as evidence for both CEB’s and the government’s dedication to renewable energy.

The tender, which was floated in December 2022, was awarded to the consortium in August 2023, following Cabinet approval in July.“This may be one of the fastest projects awarded from the day of the submission of the bid,” he remarked.

WindForce Managing Director Manjula Perera revealed that The Blue Circle will have 40 percent equity stake of the Siyambalanduwa Solar Power Plant project, with WindForce and Lakdhanavi equally sharing the remaining 60 percent.

He also said the estimated total investment of US$ 152 million for the project will include a debt component of about 70 percent. 

The financial closure of the project is scheduled for January 24, 2024 and the project is required to be completed by December 2025.

“We will have to raise funds outside of Sri Lanka. Despite the challenging conditions, we are confident of raising the required funds and completing the project ahead of schedule,” Perera said.

He noted that all the approvals regarding the project, including the acquisition of land,  have already been completed by the Sri Lanka Sustainable Energy Authority, and all those approvals will be passed on to the project company.

“It has been highlighted that raising funds for such a large project in the context will be challenging. But we are up to the task, I think. We will do our part on international financing and investor side. We are very keen to take part in this project,” Blue Circle CEO/Co-founder Olivier Duguet said.