Sahasdhanavi power deal under fire
View(s):A power purchase agreement between the Ceylon Electricity Board (CEB) and Sahasdhanavi Ltd for a 350MW dual-fuel power plant is facing serious allegations of using outdated economic data to mislead the Cabinet of Ministers into approving the agreement.
Sahasdhanavi Ltd, a fully owned subsidiary of LTL Holdings Ltd, signed a 25-year Power Purchase Agreement (PPA) with the CEB to construct and operate a combined cycle power plant at Kerawalapitiya. The project, to be based on Regasified Liquefied Natural Gas (R-LNG), was promoted as an economic means of strengthening the national grid.
However, energy sector analysts and the Electricity Consumers’ Association (ECA) say a revised Cabinet Memorandum submitted in January 2025 used outdated pricing data—including diesel, LNG, and the dollar exchange rate—to justify the project.
The company has informed the Cabinet that while the plant is intended to operate as an LNG-powered facility, it would take at least three years to build the necessary LNG terminal. Until then, the plant will have to run on diesel. Cabinet documents note that the cost per unit using LNG is Rs. 20, but current diesel-based generation costs Rs. 72.11 per unit, as per the Public Utilities Commission (PUCSL). With a capacity of 350 MW, operating the plant on diesel for a year would cost Rs. 111.3 billion, incurring a Rs. 73 billion annual loss to the government
The PUCSL has also reportedly raised concerns over the outdated assumptions, warning of significant financial risk to the government and consumers.
As Sri Lanka navigates its way towards economic recovery, this deal is fast becoming a litmus test for good governance, accountability, and transparency in the energy sector.
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