Minister discusses with major US power and energy players Sri Lanka’s need to diversify its power generation system

Hon. Susil Premajayantha, Minister of Power and Energy of Sri Lanka concluded a one day visit to the US receiving a positive response from the US Trade and Development Agency and the World Bank for assistance in diversifying and upgrading the power and energy sector in Sri Lanka.

Minister Discusses Trade and Development Agency Financing

At a meeting with the Country Manager/Asia of the United States Trade and Development Agency (USTDA), the Minister reviewed USTDA technical assistance for consultancy services on the development of a 300 MW coal fired power plant within the agreement signed in July 2003 between the US and Sri Lanka for the award of US$560,000 in terms of technical assistance for the above project.

Minister Premajayantha informed USTDA that Sri Lanka, having maximized its hydro power potential, is now seriously considering developing coal and thermal power plants to meet the country’s special needs in the power and energy sector. The Minister also informed the need to engage in off -shore oil and gas explorations to increase Sri Lanka’s capacity to manage the effect of fluctuations in the global oil prices.

Country Manager /Asia, pointing out that power and energy sector development being part of USTDA mission objectives, expressed a willingness to consider favourably Sri Lanka’s request for expert services in this sector.

Discussions at the World Bank

Minister Premajayantha met with Mr. Praful Patel, Vice President, South Asia Region to inform Sri Lanka’s priorities in the power and energy sector and to discuss potential World Bank assistance for meeting these priorities. Highlighting the anticipated power shortages, given Sri Lanka’s predominant reliance on hydro-electricity and the rising cost of relying excessively on thermal power that threaten to impede economic growth, the Minister expressed the need for diversifying Sri Lanka’s energy generation system to meet the consumer and industry needs and, to mitigate the negative impact of global hikes in oil prices. In this context, Minister Premajayantha informed Sri Lanka’s need for technical assistance to support off –shore oil and gas explorations. Vice President Patel informed the Minister that the World Bank is willing and flexible in meeting Sri Lanka’s special needs as outlined by the Minister.

Minister Discusses Investment Opportunities with Major US Players in Power and Energy Sector

Meeting with Senior Executives of Caterpillar Power Ventures Corporation, the Minister reviewed progress made on the company’s investment in a US$ 60 million joint venture power generation project in Sri Lanka with the Aitken Spence Company. The construction of a 100 MW power plant at Embilipitiya by the Joint Venture Company ACE Power Embilipitiya Pvt. Ltd., which is already underway, will be commissioned in April 2005 and commercial operations are expected to commence in May 2005. Minister Premajayantha also discussed investment opportunities in the alternative energy area and in coal and thermal power plants in Sri Lanka.

Caterpillar Power Ventures Corporation is a member of the Sri Lanka Working Group established at the United States Chamber of Commerce and extends valuable support to promoting Sri Lanka’s trade and investment agenda in the US. The Corporation also supported humanitarian de-mining activities in the North by sponsoring one of the specially trained de-mining dogs in the canine de-miming program recently launched in Sri Lanka.

Discussing the status of the Kelanitissa Pvt. Ltd. (AESK) owned by AES Corporation USA, the Minister discussed new opportunities emerging in the alternative and renewable energy sector in Sri Lanka.

Both, Caterpillar Power Ventures Corporation and AES Corporation USA informed Minister Premajayantha that they are fully satisfied with their investments in Sri Lanka and found the investment climate and the capacity of local banks and companies in Sri Lanka attractive to forge future business partnerships.

Discussions with Senior Officials of US Energy Association (USEA)

At the meeting with Senior Officials of the USEA, the Minister discussed ways of establishing a partnership with the USEA to share its experiences in the areas of power transmission and distribution, energy sector regulation, energy efficiency and utility management under its Energy Partnership Program and its affiliation with the South Asia Regional Initiative for Energy Cooperation and Development (SARI/Energy). Minister Premajayantha also informed the special emphasis given to rural electrification programs under rural sector development envisaged in Sri Lanka’s Millennium Challenge Account (MCA) Compact and discussed potential programs under the USEA and USAID.

USEA, a member of the World Energy Council, is a non-profit association of over 165 public and private energy related organizations, corporations and government agencies and, is funded by the US Agency for International Development (USAID).

Minister Premajayantha’s discussions with the USTDA, the World Bank, USEA and the two major US players in the power and energy sector and, their positive response to Sri Lanka’s needs, seek to broaden and deepen the growing US-Sri Lanka partnership in the power and energy sector.

Embassy of Sri Lanka
Washington DC
USA

13 August 2004