Lakdhanavi Limited

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Government of Sri Lanka (GoSL) awarded a 15 year build-own-operate (BOO) contract to Lakdhanavi Limited in 1996 to build and operate a 24 MW thermal power plant at Sapugaskanda, 15 km from the capital city of Colombo. Power generated from this plant was sold to Ceylon Electricity Board (CEB), state-owned vertically integrated power utility, under a 15 year power purchase agreement signed in December, 1996. Lakhdhanavi Limited was the first independent power producer (IPP) to be commissioned in Sri Lanka after the power sector was opened up to private participation in 1997. GoSL was keen to reduce Sri Lanka’s dependence on hydropower and diversify its power generation capacity after the severe drought of 1996 affected the country's power output and hit a number of industries, pulling gross domestic growth down to 3.8 percent. Lakdhanavi Limited was a fully owned subsidiary of Lanka Transformer Limited (LTL). LTL was owned by Ceylon Electricity Board (majority shareholder), ABB Group (27%) of Switzerland (Asea Brown Boveri (ABB)) and an Employees Trust. The total cost of the project was estimated at US$ 16 million. The project reached financial closure in January 1997. The entire financing for the project, both equity and debt, were arranged locally. Lakdhanavi Limited began commercial operations in December 1997.