Charged up: NTPC all set for maiden overseas foray

NEW DELHI: Power generation major NTPC is all set to take its first step overseas. NTPC will be setting up a 500mw coal-based plant in Sri Lanka. The Rs 2,500-crore project will be executed by a joint venture between NTPC and Ceylon Electricity Board. “If all goes well, we’ll be signing the memorandum of agreement next month,” said NTPC chairman & MD T Sankaralingam. The Indian power major is looking forward to get a nod from the Sri Lankan government.

NTPC is likely to hold 50% equity in the proposed joint venture company while Sri Lanka’s power utility Ceylon Electricity Board will hold the remaining 50% stake. The proposed plant will be set up on a build, operate, own and transfer basis.

The 500mw plant will be built in one go and would be run on imported coal. The annual requirement of coal would be around 2.5 million tonnes. At current prices, this will cost around Rs 600 crore per annum. It is likely that coal for the power plant will be imported from Indonesia through Sri Lanka’s Trincomalee port. Power from the plant will be sold in Sri Lanka.

Though the MoU is yet to be signed, the NTPC-Ceylon Electricity Board joint venture seems to be a done deal. NTPC has been in talks with the Government of Sri Lanka since 2005 to set up a power plant in the country. The earlier proposal was for a 900mw LNG-based plant. The Sri Lankan government had expressed a preference to tie-up with NTPC rather than a private sector company.

Signing up with NTPC would make the deal seem more like a government to government deal, as both the Indian power major and Ceylon Electricity Board are stateowned utilities. NTPC, which has an installed power generation capacity of 26,000 mw in India, plans to increase its capacity by nearly threefold over the next 10 years.