Financial Times

Wind powered electricity generation projects halted

By Natasha Gunaratne

A presidential directive was handed down two weeks ago to suspend all wind powered electricity generation projects while an investigation is carried out into allegations of wrongdoing in allocating energy licences and a re-examination in the structure of the wind power tariff, official sources said.
The directive to the Secretary of the Power and Energy Ministry which came on September 14 was instigated by a complaint received by the President.

The Secretary directed the Sustainable Energy Authority (SEA), which comes under the Ministry, and the Ceylon Electricity Board (CEB) to suspend their activities until the complaint is dealt with, the sources said. One source from the Ministry told the Sunday Times FT that the complaint on the wind power tariff was that it had not been set properly. There were also allegations that energy licenses are being sold, similar to how car licenses have been sold.

However, the Ministry source said action will only be taken on the complaint when the Secretary to the Ministry returns from an overseas trip on September 28. The source said the complaints appear to be baseless although there will have to be a review of the wind tariff. He stressed that this was not a ‘serious thing’ and the SEA and the CEB are following the course of action that has to be taken.

Power industry experts said there is a lot of potential in Sri Lanka for wind powered electricity generation projects. One expert told the Sunday Times FT that a 10 MW plant for which the ground work has already been laid out in Kalpitiya in the Puttalam district is a fairly large investment and would be in excess of $20 million.

A lot of companies would look towards bringing foreign investment as well although the bulk of the funding would be from banks. The expert added that banks in Sri Lanka do not have a great deal of experience in wind power and keep citing an unsuccessful wind project in Hambantota in the late 1990’s as one reason they cannot lend.

The industry expert said complaints and subsequent investigations of this nature dampen investor confidence. The expert added that foreign investors are interested in coming to Sri Lanka, particularly for wind projects. It is an attractive investment because Sri Lanka has one of the best tariffs.

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